In the U.S. Gulf, December space is becoming scarce, and rates are expected to rise further. Neither Europe nor Asia are particularly busy, but ships generally have several voyages booked ahead, and prompt space is no longer so common.
Space is tight along the route into the Far East, mainly because of contractual commitments and less so because of spot activity. Rates are notionally assessed as being in the $60-$65 per metric ton region for 5,000-ton parcels, but in practice they could even be $10/t higher should a charterer really need to shift product before year-end. The whole range of commodities is available, from methanol, ethanol, styrene, paraxylene, ethylene dichloride, nonene, cumene, vegetable oil and tallow
The transatlantic route has an end-year feel about it, with many commodities competing for the space that is still available. Rates have been climbing steadily, and a 5,000-ton parcel from Houston to Rotterdam will now fetch around $50/t. The breadth of demand encompasses many products, but includes styrene, vinyl acetate monomer, caustic, methanol, glycols, orthoxylene and biodiesel. Four thousand tons of base oils from Houston to Le Havre, France, have been quoted already for a couple of weeks without finding cover, while others are hoping that their requirement of 15,000 tons of base oils from Houston and Lake Charles, Louisiana, to Lagos, Nigeria, will make a tempting target for owners with slightly larger vessels.
Perhaps the ugly duckling of the U.S. markets, there is usually more space available for cargoes into the Caribbean than on most other routes, and rates demonstrate stability. The route is characterized by large cargoes of caustic currently, with 19,000 tons fixed from Houston to Jamaica for a rate reported to be around $18-19/t.
Business is more mundane into Brazil and Argentina, but that said, space is finely balanced along the east coast of South America route, and rates are more likely to increase than decrease. Aside from the usual small lots of base oil, cargoes of ethanol, glycol and styrene dominate are being seen. Interestingly, caustic is being quoted back out from Santos, Brazil, and Aratu, Brazil, rather than into these ports, which would normally be the case.
Rates are moving up on the route to India and the Middle East Gulf. Fifteen thousand tons of chemicals from the U.S. Gulf to India seemingly went in the mid $60s/t, which represents a 10 percent gain. Another 15,000 tons of base oils were booked from Houston to the west coast of India too, although those levels have yet to be reported. Traders are looking at some very large cargoes of styrene and ethanol in this direction.
Spot market demand falls short of what would be customary at the end of November along the North Sea and Baltic route, although there has been just about enough cargo for most owners to avoid having more than the occasional idle vessel. FAME and ethanol have been well represented this week, and there have been several base oil cargoes in and out of the Baltic.
Fewer cargo possibilities have been recorded going southbound this week. Caustic continues to provide the occasional opportunity, and biodiesel saw several more ships booked south. Three thousand tons of styrene was noted looking to go to Barcelona, and 4,000 tons of acrylonitrile was spotted from Ventspils, Latvia, to Yalova, Turkey. Fifteen thousand tons of vegetable oil was noted from Kaliningrad to the Mediterranean, but few base oil requirements have been noted.
A few more northbound cargo possibilities surfaced during the week, and space has not been that plentiful since some of the toluene and pyrolysis gasoline requirements from Italy had to be deferred. Traders are looking at sending paraxylene from Haifa, Israel to Sines, Portugal. Aside from FAME, glycerine has also been booked out of Spain. Fifteen thousand tons of C7 and gasoline components have been seen from Lavera, and another base oil cargo was booked out of the East Mediterranean.
It has been slightly busier within the Mediterranean. FAME of course has topped the list in terms of fixtures, but there have been some interesting aromatics possibilities as well as cargoes of caustic, glycerine, vegetable oil and base oil. Several ships appear to have dropped out of laycan and charterers have been out seeking prompt replacements, which has tightened prompt space as well.
It has been somewhat busier on the westbound transatlantic route. Ten thousand tons of paraxylene was circulated from Rotterdam to the U.S. Atlantic Coast, and traders were noted checking freights for 6,000 tons of pyrolysis gasoline from Rotterdam to Houston. In addition, mixed xylenes was mentioned out of Sarroch, Italy, although that cargo could potentially go to India. Two thousand tons of linear alkyl benzene from Algeciras, Spain, to Barranquilla, Colombia, was looking to be relet. A large lot of renewable diesel was booked into Canada, and more sulphuric acid was heard to be covered. Prompt space is relatively tight, and charterers are finding that they have to dig deeper into their pockets than they would otherwise have thought.
The past couple of weeks have been pretty slow on the spot market along the Europe to the Far East route, with far fewer styrene cargoes talked. The low water levels on the Rhine have also penalized a couple of owners who would normally lift substantial volumes this way and instead, because of force majeure declarations they have had to look around for alternative cargoes. Lately, a few cargoes that regularly get done out of Europe to Asia have begun to appear on the lists for December, including base oils, butanediol and acrylonitrile, but owners hope for more.
Several ships still have completion space to offer in December into India and the Middle East, although it also seems that some cargoes, such as acetone and methyl ethyl ketone have not yet been covered. A small lot of hexane to Jebel Ali was taken, as was the 1,000 tons of acrylate to Hamriyah, U.A.E., from Gebze, Turkey, although there is already a new requirement quoted from Gebze for the second half of December. Between 500 tons and 1,000 tons of chlorinated solvents were quoted from Stade, Germany, to Vizag, Italy, and 3,000 tons of octene was circulated from Tarragona, Spain, to Jebel Ali, U.A.E. Around 7,000 tons of base oils were booked from Kavkaz, Russia, to the U.A.E., with a further 7,000 tons still quoted from Livorno, Italy. Around 9,000 tons of base oil is reportedly quoted from the Mediterranean to either the U.A.E. or East Africa. Vegetable oil is still very active from the Black Sea.
The amount of open domestic space has been steadily disappearing at a deceptive rate, with some owners now only showing January positions. It has caught some charterers by surprise as they had been given to expect that their cargoes would be easily fixable. Some of the tightness has been attributed to an accident on the Yangtze River, China, that has blocked a number of ships up the river, but this is merely a fraction of the fleet. Instead, it would simply appear to be restocking that normally takes place at this time of year. Nevertheless, if a flexible approach is adopted, there is still space around. Rates have risen, but mostly on the intra-Far East and northbound services.
There seems to be transpacific export space available on a vessel the first half of December, but traders had been targeting later positions for their benzene requirements to the U.S. Gulf. The market to Europe sees a substantial number of biodiesel and/or feedstocks, some of which are known to have been fixed. Fifteen thousand tons of base oils were being worked from Singapore to Rotterdam and Houston, and several large lots of caustic have been worked into the Mediterranean. A number of small parcels have been quoted to Turkey, with 2,000 tons of butac from Jiangyin, China, to Gebze claimed to be fixed at around $140/t. Between 8,000 tons and 9,000 tons of vinasses from Vietnam to the Baltic was an interesting possibility. Six thousand tons of cyclohexane remains uncovered from Map Ta Phut, Thailand, to Antwerp-Rotterdam-Amsterdam.
There is a reasonable amount of activity in regional markets along the India and Middle East Gulf route, which includes benzene, pyrolysis gasoline, methanol, ethylene dichloride, base oil and the usual small parcels of solvents. Eastbound is unchanged, with a fair amount of demand but equally a number of ships that are still available. Ten thousand tons of methanol was heard to be worked from Mesaieed, Qatar, to Southeast Asia for around $39/t, whilst 18,000 tons aromatics the west coast of India to Southeast Asia were heard to have fetched just $20/t. Westbound is also unchanged, and 12,000 tons of canola from Jebel Ali to Rotterdam looks to be still uncovered after several weeks of trying. Ethanol and aromatics have been noted.
This report was originally featured in the Dec. 5 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.