The European market has fared better than other regions this week. Asia has flopped again, and the U.S. looks rather ragged in places. Rising bunker costs are becoming a major factor for owners who will be trying to recoup the extra cost through higher freights.
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The U.S. Gulf to Far East market is still a long way from being comfortable. Traders have been playing around with parcels of styrene to China and Korea, but rarely seem to finalize anything. Domestic markets are sufficiently attractive to sellers, and some freight possibilities never materialize. This week, for example, 5,000 tons of paraxylene was being tendered from Corpus Christi, Texas, but the cargo ended up being sold locally. The same occurred with 3,000 tons glycols from Geismar, Louisiana. Nobody seems to be paying base oils any interest on this route.
Rates along the transatlantic route have stayed roughly where they were, in spite of a few owners attempting to push through increases. Seven thousand tons of methanol from Beaumont, Texas, to Rotterdam, for instance, was reported to have fixed at a distinctly ordinary $42-44 per metric ton level. Interest in styrene has slowed, apart from a possible cargo to Turkey. Base oils have in fact been slipping across almost unnoticed. One ship brought in a small cargo from Paulsboro, New Jersey, but seemingly for a major producer and not for a trader. Another vessel is discharging 6,500 tons at the moment from the U.S. Gulf.
It has been pretty quiet into the Caribbean this week, with a bunch of ships all open before the end of the month, but aside from caustic there is not much to work on. Three thousand seven hundred tons of base oils were fixed from the U.S. Gulf to Rio Haina, Dominican Republic, but there has been no news so far on the Cartagena, Spain tender.
Caustic continues to be seen on the southbound route to the east coast of South America, along with ethanol. Rates look a bit firmer, seeing that 8,000 tons of ethanol from Beaumont to two ports in Brazil was fixed in the low $60s/t. Styrene and ethylene dichloride are also being looked at to Brazil.
Space to India and the Middle East Gulf might have been scarce for May loading; that is until several ship barged on berth, one of which took 15,000 tons of ethanol from the U.S. Gulf to the west coast of India. Eleven thousand tons of base oils were confirmed to be fixed from the U.S. Gulf to the west coast of India option Middle East Gulf for June 1 to June 10 loading.
It has been surprising just how much business is occurring in North Sea and Baltic area. There are, of course, open ships, but far more revealing has been the number of cargoes that were quoted in the previous week that have still to be covered. Demand has been more diverse this week, and goes beyond just biodiesel and ethanol. Base oils have been fairly well represented, with several shipments out of the Baltic, as well as several more along the North Sea coast.
Southbound demand is still quite healthy, and a number of requirements are still looking for space, including some base oils to Turkey and Egypt. Rates are generally stable. For example, $220,000 was paid to move 6,300 tons of base oils from Fawley, U.K., to Vado, Italy, and 32/t was paid to send 7,000 tons of sulphuric acid from Antwerp to Ravenna, Italy, although it cost 210,000 to ship 4,500 tons of biodiesel from Rouen, France, down to three ports in the French Mediterranean.
Northbound demand has been reasonably strong coming back up out of the Mediterranean, but it has been well-matched by the number of ships on berth. Rates are therefore pretty much average. Five thousand tons of paraxylene from Aliaga, Turkey, to Sines, Portugal, for example, settled at $38/t. A small parcel of base oils is looking to ship from Greece to Ghent, Belgium, but otherwise there was not much base oil movement northwards.
A few prompt positions can be found scattered across the intra-Mediterranean route, but for the most part ships have a reasonable forwards program. Aromatics had another busy week, and there were some caustic fixtures. Biodiesel has been as busy as ever, and base oils have seen quite some activity. Three thousand three hundred tons of base oils were fixed from Livorno, Italy, to La Goulette, Tunisia, in the low 30s/t, and 3,200 tons was fixed from Cartagena, Spain, to Haifa, Israel. Further base oil enquiries have been noted into Egypt, Morocco and Spain.
The pace of the westbound transatlantic market has really not let up, and there have been more outsiders pulled in to alleviate the shortage of space. One such vessel ended up taking a cargo of hydrocracker bottoms from Flushing, Netherlands, to the U.S. Gulf. Others have booked slugs of biodiesel, while others took magnesium chloride, urea ammonia nitrate, pyrolysis gasoline, paraxylene, caustic, toluene, xylene, acetone, aniline, with one parcelling up with 13,000 tons of solvents and aromatics to Savannah, Georgia, Houston and Mexico for a rate said to be around $700,000. Even in the past day or so, a couple more outsiders have been seen to go on berth making this route one of the hottest anywhere, and giving a staggering total of cargo moved over the entire month.
Hardly any May space remains into the Far East, and with contractual demand remaining quite strong it remains to be seen how much June space there will be. Styrene is being attempted, but the lack of space is hampering traders efforts. Five thousand ton parcels from northwestern Europe to Yangtze River, China, have been seeing offers in the $95/t region.
India and the Middle East Gulf Space is pretty tight for May loading, with owners talking rates mostly between $80-90/t for 5,000-ton parcels. A small lot of base oils was heard to have fixed at this kind of level.
It has been very dull across most of the Asian domestic markets this week. The only region that seems to have recorded any form of tightness in space has been the intra-Far East route, and even then there are a number of very small units still available for May loading. Bigger vessels however have managed to find cargoes of toluene, mixed xylenes, paraxylene, solvent naphtha C9, benzene, styrene and acetone. Base oil activity has been rather muted throughout Asia, although a requirement to move 1,500 tons of rubber process oil from Rayong, Thailand, to Zhangjiagang, China, remains unfixed for a third week.
Traders continue to look at benzene on the transpacific export route, with reports of 5,000 tons fixed frp, Korea to the U.S. Gulf in the low $50s/t. Some 25,000 tons of paraxylene, mixed xylenes and benzene appears to have fixed from Ulsan, South Korea, to the U.S. Gulf, U.S. Atlantic Coast and the east coast of Mexico at an alleged $58/t. Ten thousand tons of base oils from Singapore to the U.S. Gulf were booked in the low $70s/t. This cargo had been seeking the first half of June space but ended up on a second half of June loader. The market to Europe continues to see activity, but apart from new ships coming straight from shipyards, and a few larger ships with space out of Southeast Asia, there is not much space around. Two thousand tons of base oils from Singapore to Rotterdam were said to have been fixed at $120/t, while 3,000 tons of acetic acid from Singapore to Antwerp secured $90/t. Biodiesel and sulphuric acid have both been busy in this direction and have absorbed much of the space.
Ramadan has begun, causing regional trades along the India and Middle East Gulf route to slow down. That said, 9,000 tons of base oils from Al Ruwais, U.A.E. to Mumbai seemingly attained a rate in the low $30s/t, which is a fairly strong level. Eastbound markets have flattened, and there have been several ships that could accommodate end May cargoes. Westbound has not been particularly busy, but there have been enquiries to move paraxylene, benzene and ethanol.
This report was originally published in the May 23 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.