The first week of 2019 has been unexceptional in terms of new business, but allowances must be made for the remnants of the holiday season. Competitive freights can be secured in all regions for prompt loading, at least until cargo volumes pick up over the next week or two.
Owners along the Far East route now have more clarity on their contractual volumes this month, which has freed up a little spot market space for January. Most requirements, however, have been for large liftings of methanol, the rates for which are determined more by the clean petroleum market than by the parcels trade. The clean petroleum market is currently strong, which is reflected in the rates for methanol and ethanol.
The rates that were in place at the end of 2018 for transatlantic shipments, namely levels in the $60s and $70s for 5,000-ton parcels, are no longer applicable, and the market has started afresh. Initially, some owners were willing to accept mid $40s per metric ton, but the flow of cargo is starting to build. Several cumene requirements have been noted to Antwerp-Rotterdam-Amsterdam, with another cargo believed fixed into the Adriatic. Cargoes of vinyl acetate monomer, tall oil, styrene, acrylonitrile, glycol, ethanol, caustic, vegetable oil, urea ammonia nitrate and methanol have been quoted into northwestern Europe and the Mediterranean.
It is still too early to determine any notable pattern into the Caribbean. There is not a great deal of spare open tonnage in the U.S. Gulf until later in January, nor is there much new enquiry. Ten thousand tons of ethanol was booked from Houston to Cartagena, and 10,000 tons of caustic was booked from Point Comfort, Texas, to Puerto Cabello, Venezuela, Traders are looking at 15,000 tons of methanol from Jose, Venezuela, to the U.S. Gulf, and some small drops of caustic, mixed xylenes and vegetable oil have been studied.
Traders are understood to be lining up ethanol possibilities into Brazil along the route to the east coast of South America. Already 10,000 tons to 20,000 tons of ethanol has been quoted from the Texas Gulf to Itaqui-Aratu range in Brazil for the second half of January. The clean petroleum market in the Caribbean remains hot, and owners are reluctant to consider parcelling up into South America right now.
There are rumors of a large ethanol cargo that has been fixed from the U.S. Gulf to the west coast of India, but details are sketchy. Traders worked 15,000 tons to 20,000 tons of aromatics from the U.S. Gulf to India and Pakistan, but the deal failed to conclude. Various traders are looking to take base oils to India, with some looking at Paulsboro, New Jersey, supply and others at Pascagoula, Mississippi, or even at a combination of the two. Styrene too is of interest to traders, and 7,000 tons was seen from the U.S. Gulf to the west coast of India.
This year started off as slowly as 2018 ended along the North Sea and Baltic route. Virtually every vessel is open within the first two weeks of January, which makes for some very competitive numbers. Four thousand-ton parcels of easy chemicals from Port Jerome, France, to Rotterdam have been fixed on several occasions for around $60,000, for example, which is significantly down from the $78,000 done at the end of November. Base oils have actually been one of the more productive products in the region, with a heavy flow of material out of the Baltic, and a number of spot fixtures in the North Sea.
Contractual volumes have yet to fully kick in on the southbound route, and, as a result, there have been several scheduled vessels showing space, along with a rather large number of spot players. Business to Turkey is gradually getting back on track, with a number of spot fixtures and enquiries noted, including base oils. However, the core biofuels market, which feeds the West Mediterranean with ships off Continental Europe, has not flourished sufficiently well to absorb many of the open ships. A further cargo of base oils has been fixed to Egypt from Le Havre, France.
Northbound demand is slowly reappearing after the holidays. A flurry of alkylate and pyrolysis gasoline requirements were quoted out of Augusta, Sicily, with 5,800 tons reportedly fixed at $240,000. Also noted were 11,000 tons of base oils from Augusta to Rotterdam, and 4,000 tons of caustic was quoted from Lavera to Cardiff, Whales. A parcel of heavy aromatics loaded from Aliaga, Turkey, to Antwerp-Rotterdam-Amsterdam, and the next lifting is already being circulated. Four thousand five hundred tons of base oils from Spain to La Pallice, France, were booked for around 28/t.
The inter-Mediterranean market is generally considered to be poor, and rates have weakened under pressure from the amount of open tonnage in the area. Biodiesel is not yet up to full speed, but still manages to provide employment for a large percentage of the Mediterranean fleet. Base oils are moving reasonably well, with cargoes being shipped to the main destinations in North Africa and East Mediterranean. Caustic shipments have resumed to Turkey from the French Mediterranean, and some small methanol requirements have been seen again after a long interval. Clean petroleum is also gathering pace, and vegetable oil demand should improve, which suggests that the Mediterranean should be back on track shortly, perhaps by mid-month.
Westbound has been pretty sedate, but because the clean petroleum market has been so firm, competition from combi-carriers has been less severe along the transatlantic market. Indeed, some chemical tankers have been seen taking gasoline-type cargoes instead. Nineteen thousand tons of paraxylene was heard to be fixed from Rotterdam to the U.S. Atlantic Coast at $28/t, though $24/t was also reported. Additionally, 5,000 tons of paraxylene was quoted from Kotka, Finland, to the U.S. Atlantic Coast, and 5,000 tons to 10,000 tons of methyl tertiarybutyl ether was quoted from Rotterdam to Veracruz, Mexico. Forty thousand tons of urea ammonia nitrate from Sillamae, Estonia, to the U.S. Atlantic Coast is reported to have paid high $20s/t. One thousand tons of solvents from Rotterdam to the east coast of Mexico went at $127/t, and 2,500 tons wax was worked from Augusta to Baton Rouge, Louisiana, but may not have lifted subjects. Four thousand tons MDI was seen from Tarragona, Spain, to Houston.
The market into the Far East remains slow after the holidays. Fifteen thousand tons of paraxylene fixed from Rotterdam to China at $72/t, as per the previous shipment at the end of December. Three thousand tons of octane concluded from Tarragona to Map Ta Phut, Thailand, and 2,900 tons of butanediol was booked from Rotterdam to Dongnai, Vietnam. Between 15,000 tons and 20,000 tons of tallow was quoted from Rotterdam to Singapore, and 2,000 tons base oils were seen from Antwerp to Singapore. Thirty thousand tons of urea ammonia nitrate is claimed to be fixed from Sillamae to Kwinana, Australia. One thousand tons of monopropylene glycol was still circulated from Rotterdam to Kaohsiung, Taiwan.
There is not a great deal being quoted into India and the Middle East Gulf so far this year, except perhaps for some vague styrene interest to India from Antwerp-Rotterdam-Amsterdam.
The regional market in Asia withstood the recess for the holiday season better than most, with the result that space is fairly tight throughout the region in January. The domestic routes in Northeast Asia have been among the busiest, but have also been most prone to bad weather delays, with some Korean and Chinese ports registering long berthing delays. Moreover, most fresh enquiries in this sector have specified January loading, and, consequently, charterers may have to pay a premium in order to secure any remaining space. Base oils have been active throughout Asia, with multiple shipments into Taiwan and Korea, as well as northbound movements from ports in Southeast Asia.
Even though there is little benzene moving transpacific westbound, export rates are stable since owners have alternatives, such as aniline, caustic, mixed xylenes and plenty of sulphuric acid, the latest fixture of which paid low $60s/t for 30,000 tons from China to Chile. There is even a strange quotation of 10,000 tons of methanol from China to the U.S. Gulf for the second half of January. Activity to Europe has still to pick up, especially with biofuels that seem quieter than normal. An outbreak of swine fever in China is thought to be the cause of reduced availability of used cooking oil. Nine thousand tons of multigrade chemicals from mid-China to Turkey were reportedly fixed at a competitive rate of $80/t, while 3,500 tons to 4,700 tons of acetic acid was worked from Kerteh, Malaysia, to Turkey in the low $100s per ton. There are some caustic requirements to Europe, and cyclohexane is still there from Maptaphut, Thailand.
Prompt space remains tight in the regional markets along the India and Middle East Gulf route, and rates for smaller parcels of chemicals are firm. Eastbound sees limited space opportunities among the scheduled carriers, which is keeping freights reasonably stable. Cargoes of styrene, glycol, paraxylene, MTBE, methanol and base oil are regularly pushed. Westbound space is tight for January, and some cargoes have been quoted repeatedly without getting fixed, including a small parcel of base oil from Yanbu, Saudi Arabia, to Turkey. The latest tender for 15,000 tons of paraxylene from Yanbu is expected to go westbound, according to traders.
This report was originally featured in the Jan. 9 edition of Lube Report Americas.
Adrian Brown is a senior market analyst for chemicals and base oils with SSY Shipbrokers, London, can be reached email@example.com +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.