The impact of the increasingly bitter trade feud between the United States and China is making itself felt across all shipping routes from the U.S. Gulf, resulting in reduced activity. Asian markets were quieter last week, whereas Europe stayed roughly the same.
There is still quite a lot of prompt open space for cargoes on the route from the U.S. Gulf to the Caribbean. Just about everything seems to revolve around caustic, vegetable oil and molasses at the moment. Cargo sizes tend to be large too, with most of these latest requirements all topping 10,000 tons. Even the canola oil that is quoted from Vancouver to Houston is for a 10,000-tons parcel. Not much has been heard in the small parcels trade, which includes base oil.
The market is fairly active along the route into South America. A couple of large caustic and ethylene dichloride shipments were booked in the wake of last weeks stoppage at a Brazilian chlor-alkali plant. Further caustic inquiries have been seen in addition. Various ethanol requirements are still seeking May and June ships into Brazil. Thirty thousand tons of urea ammonia nitrate will be pushed from the U.S. Gulf to Argentina for June, and 2,700 tons of base oils were quoted from Pascagoula to Rio de Janeiro for June 20-30. A prompt shipment of methanol from Jose to Brazil is being quoted to replace a late-running contractual vessel, while 20,000 tons of styrene is rumored fixed into Brazil for June out of the U.S. Gulf.
Whilst styrene has virtually disappeared from the Transatlantic eastbound cargo lists, with the exception of Turkish destinations, other products were quoted that might fill the void. Not that there is a huge amount of space to fill anyway, and now even less so since a large contractual volume had to be re-fixed on a spot basis when the original performing vessel ran late and was cancelled. Several large palm oil cargoes out of the Caribbean have absorbed some of the space, and large requirements for sulfuric acid on the route from Canada to Morocco and caustic on the route from the U.S. Gulf to Durban will probably account for several more vessels.
Not much was quoted over the past week on the route from the U.S. Gulf to Asia, even for products that are unaffected by the hike in tariffs. Around 20,000 tons of methanol looks to be loading from Jose to the Far East. Three thousand tons of vegetable oil was fixed from New Orleans to Port Klang for end-of-May loading.
Various traders are all looking at June cargoes of ethanol from the U.S. Gulf to the west coast of India and/or to the United Arab Emirates. Meanwhile, 18,000-19,000 tons of canola is rumored to have fixed on the route from Vancouver to the west coast of India.
It has been a slower week on the North Sea and Baltic route, and owners still need to clear out a lot of end-May tonnage. The variety of business quoted has not been as rich either, with a heavy reliance on biofuels to keep ships from becoming idle. A splash of methanol to Havre and Barry has enlivened the European continent, and several urea ammonia nitrate shipments were booked out of the Baltic, whereas aromatics have been poor, aside from a couple of relet possibilities. Base oils have been sluggish too.
As with last week, demand on the southbound route is strong into Turkey, with some of the same requirements still unfixed. A shipment of 13,200 cubic meters of renewable diesel from Rotterdam to Lavera is heard to have fetched $240,000, with a similar rate heard for 5,000 tons of biodiesel from Ghent to Taranto. Three thousand five hundred tons of alkylate was booked from Amsterdam to Greece, and 6,500 tons of base oils were fixed from Fawley, United Kingdom, and Rotterdam to Vado. The rate reported for the shipment of 24,000 tons of base oils from Rotterdam to Valencia was $19 per ton. Five thousand tons of ethanol was fixed from Rotterdam to Fos, while 4,700 cbm of ethanol was still being quoted from Rotterdam to Greece.
Owners have attempted to raise northbound rates. Five thousand tons of pyrolysis gasoline from Berre to Antwerp-Rotterdam-Amsterdam saw freights some 5 to 10 per ton above last-done levels, but eventually in-house tonnage was allocated to the parcel. Three thousand tons of benzene was seen from Lavera to Aveiro. Four thousand five hundred tons of glycerine was booked from Spain to Antwerp-Rotterdam-Amsterdam, and a further 1,800 tons of glycerine was quoted from Huelva to Rotterdam. Three thousand tons of base oils were concluded on the route from Livorno to La Pallice.
Biodiesel has come to the rescue of the Mediterranean market once again with numerous fixtures recorded. Caustic has been booked from Lavera into Turkey and from Tarragona into Genoa, while two parcels of urea ammonia nitrate, totaling 14,000 tons, were apparently booked from Damietta into Spain. Three thousand tons of urea ammonia nitrate went from Novorossisk to Haifa, with the next requirement quoted for early June. Vegetable oil was busy again out of the Black Sea, where a shortage of suitable tonnage is keeping freights firm. Methanol is being attempted from Arzew to Gebze and also from Marsa to Spain.
Not all the aromatics that had been attempted last week on the transatlantic route actually came to fruition. The pyrolysis gasoline from Fawley looks as though it will end up in Moerdijk rather than in the U.S. Gulf. However, 4,000 tons of toluene was covered, and a large lot of paraxylene is reported to have fixed from Rotterdam to the U.S. Atlantic Coast and the east coast of Mexico, allegedly at a strong rate, which seems at odds given that another owner has as much as 30,000 tons of space spread over three vessels on the same prompt position. A further 3,000 to 5,000 tons of paraxylene was quoted from Gonfreville, France, to the U.S. Atlantic Coast. Thirteen thousand tons of sulfuric acid from Bilbao the U.S. Gulf achieved mid $40s per ton. Three thousand tons of aniline was spotted from Rotterdam to Houston. Twenty thousand tons of methanol was pushed from Marsa to New York, and 4,000 tons of vegetable oil was looking to ship from the Black Sea to New Orleans. Two thousand four hundred tons of drilling fluid was fixed from Le Havre, France to the U.S. Gulf. A small parcel of base oil was quoted from Leixoes to Houston. Several urea ammonia nitrate requirements from the Baltic were covered into the east coast of Canada, the west coast of the U.S. and Argentina. Around 11,000 tons of base oils were booked from Baltic to Nigeria for loading this week.
There is a lot of open space on the Far East route. Traders have begun quoting styrene to China, with at least one parcel fixed. Some of the small parcels of butanediol and glycol ethers that were quoted to Kaohsiung and Yokohama appear to have been covered, but a parcel of 2,900 tons to Dongnai has still to be worked. Three thousand three hundred tons of base oils are reported to be loading from Antwerp to Nantong. There is also talk of possible methanol cargoes to be shipped to Asia from the Mediterranean and Black Sea.
Base oils have been active this week along the India and Middle East Gulf route, with cargoes heading in this direction from France, Greece and Black Sea, in addition to yet more volumes from the Red Sea. Styrene is also discussed, and 15,000 tons of methanol concluded from Arzew to the west coast of India.
It has been a much slower week across all routes in Asia this week. Even the Intra-Far East route has slowed. There had been a decent number of prompt requirements, but most of these have now been covered, and this still leaves some open tonnage towards the end of the month. For example, 2,000 tons of base oils from Ulsan to Manila remain unfixed, and trying to combine 700 tons of aviation gasoline has not really made the cargo more appealing. Northbound sees some older business quoted, along with some new possibilities. Six thousand tons of unconverted oil from Bangkok to Ulsan is still available. The next lifting of 10,000 tons of paraxylene Thailand to China however is only scheduled for the second half of June. Small parcels of MTBE, phenol, pyrolysis gasoline and fatty alcohol have been seen moving up from Southeast Asia. Luckily for owners, biodiesel is still being sent into South China in large sizes. Several benzene and base oil requirements across Singapore harbor are available, and the typical pyrolysis gasoline possibilities are quoted from Thailand. while 2,000 tons of orthoxylene was seen from Singapore to Gresik for the end of May.
Traders continue to discuss benzene possibilities on the Transpacific route from Asia for June. Owners are quoting levels in the mid- to high $50s per ton for 5,000 to 10,000-ton quantities. Sulfuric acid was expected to dry up towards Chile for several months already, yet each week sees further cargoes fixed. Rates are unchanged as owners can juggle sulfuric acid cargoes to Europe too. Biofuels are still active to Europe, while parcels of benzene, base oil and acetic acid have seemingly been worked. Two thousand tons of cyclohexanone was quoted from Kaohsiung to Antwerp-Rotterdam-Amsterdam, and 2,000 to 3,000 tons of acetone was seen from Daesan to Tees. Five thousand tons of vinyl acetate monomer from Singapore to Antwerp joins the usual vinyl acetate monomer possibilities to Spain.
Ramadan is perhaps having a slight impact on the number of new cargoes in the regional markets on the India and Middle East Gulf route, but not as much as feared. Eastbound volumes focus heavily on methanol, with some sizeable cargoes noted. A few aromatics cargoes have been seen from India, Oman and Saudi, but are fewer than usual. Some MTBE is claimed fixed from Jubail. Westbound is calmer. Several base oil cargoes were quoted to Turkey from the Red Sea and the Middle East Gulf, as well as 9,000 tons of base oils from the Red Sea to Dar Es Salaam. Two thousand to three thousand tons of cumene from Dahej to Antwerp-Rotterdam-Amsterdam was an unusual quotation.
This report was originally featured in the May 22 edition of Lube Report Americas.
Adrian Brown is a senior market analyst for chemicals and base oils with SSY Shipbrokers, London, can be reached firstname.lastname@example.org +44 12 0750 7507. Information about SSY can be found atwww.ssyonline.com. In the Houston office,Steve Rosenthalof SSY's Chemical Tanker Department can be reached directly at +1 (713) 652-2700 and Jordi Maymi in Singapore can be reached at +65 6854-7127.