A lethargy is beginning to creep onto the markets worldwide. The U.S. and some Asian routes are especially quiet. In Europe, the short-sea market continues to progress, but deep-sea is fading.
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It has been a very slow week along the U.S. Gulf to Far East route. Traders have been studying ways to ship ethanol to either Korea or China, in spite of the hikes on import duty in China. Others have been attempting to put together large cargoes by combining products such as styrene, ethylbenzene and ethylene dichloride. Styrene is actually moving, and there is a feeling that more will be done, possibly under a toll basis, which apparently then avoids the additional import tariffs imposed by the Chinese authorities.
For a while, it was starting to look busier on the eastbound, transatlantic service, but many of the cargoes that came out have since been deferred into August. Methanol has been a prime example, with several shipments from the U.S. Gulf getting put back, and another out of Trinidad getting the same treatment. A bunch of ethanol requirements went the same way, and now it is the turn of the cumene requirements into Venice that seem to be slipping back. A brief flurry of benzene got fixed, with rates in the high $30s per metric ton for large cargoes, but that too has subsided. Base oils are actually one of the surprises, with one cargo already fixed and on the water to northwestern Europe, and another smaller parcel of 2,000 tons having been booked for July, with several more possibilities noted.
There is not a great deal going on along the Caribbean route. Some ships have barely changed position over the past fortnight, and there are several prompt ships open in the U.S. Gulf with nothing to do, and which could easily be lured into the Caribbean should a large enough cargo be sighted. Some ethanol is being investigated into Colombia, but the base oil side has switched off.
Ethanol happens to be the primary commodity moving south into Brazil, with one cargo also being studied to Talara, Peru, and Conchan, Peru. Three thousand tons of base oils were quoted from Houston to Guayaquil, Ecuador, and a further 1,000 tons were seen down to Quintero, Chile.
Unsurprisingly, ethanol is also making it onto the cargo lists along the India and Middle East Gulf route, with 15,000 cubic meters to 20,000 cbm quoted into the United Arab Emirates. Five thousand tons of tons styrene was booked to India, along with 2,000 tons of hexane. Base oils, however, have provided the most interest, with 10,000 tons to 12,000 tons quoted from Port Arthur to Mumbai, and a further 8,000 tons quoted from Paulsboro, U.S., to Hamriyah, U.A.E., and the west coast of India.
It is not exactly busy within the North Sea and Baltic region, nor are there a great number of prompt open ships. Biofuels is certainly one of the main reasons, with quite a lot of FAME, ethanol and glycerine being shipped. Base oils have also contributed to the activity, with a number of Baltic cargoes fixed down to the U.K. and Antwerp-Rotterdam-Amsterdam, with other movements in and around the North Sea.
Several base oil requirements peppered the southbound route into the Mediterranean, with enquiries to Turkey and Morocco spotted. Generally, the southbound market has been fairly active, with an adequate number of cargo possibilities quoted.
Northbound demand is still a little subdued going up to continental Europe. Fixtures include cargoes of biodiesel, caustic, benzene, glycerine, pyrolysis gasoline and some aromatics. Base oils have not been seen this week.
It has been another good week for biodiesel within the Mediterranean, which has help support the Mediterranean fleet and, consequently, there is not much prompt open space. Methyl tertiarybutyl ether has been busier too, with several movements detected out of Fos, France, and several more from Barcelona. Base oils have been seen from Algeciras, Spain, Cartagena, Spain, Leixoes, Portugal, and Livorno, Italy, mostly going to North Africa, Turkey and Israel.
Business has stalled on the westbound, transatlantic market. It is true that there are couple of requirements that have been quoted for several weeks, such as 10,000 tons of sulphuric acid from Hamburg to Savannah, Georgia, and 15,000 tons of urea ammonia nitrate from Sillamae, Estonia, to the U.S. Atlantic Coast, but at the same time there are several ships that have prompt space, which have been difficult to fill. Sixteen thousand tons of caustic was fixed from Rotterdam to the U.S. Atlantic Coast for loading now, and the next requirement has already been quoted for shipment later in the month.
The opportunity to ship styrene to Asia seems to be fading, with most of the cargoes remaining within Europe. Several regular base oil cargoes were worked, but since then traders claim there is no arbitrage for spot fixing base oils. Space is starting to show up too, even on scheduled carriers.
A bit more space has opened up on contractual tonnage heading out towards India and the Middle East Gulf in July, tempering any further rate rises. Traders are looking at aromatics to India and Pakistan, and there has been a little bit of interest in base oils. Vegetable oils have quietened from the Black Sea, and there is space available from there too.
Nothing really exceptional is taking place within the domestic Asian markets this week. Some routes, such as the southbound market, have been very disappointing for owners, which has meant very competitive freight levels for cargoes, such as base oils, that are actually still moving to Singapore, the Philippines and Southeast Asia. The intra-Southeast Asia route is rather flat too, although there are a few base oil requirements here too, out of Cilacap, Indonesia, for example, to Port Klang, Malaysia, and Nantong, China. Elsewhere, trade is steady, but it is still common to see ships ballasting away due to a lack of cargo.
Benzene has been active on the transpacific export route to the extent that there are only a few carriers left with space in July. Twenty-one thousand tons of benzene was booked from Korea to the U.S. Gulf at a level reported to be around $40/t. Further benzene enquiries have been seen for July, but more focused on the usual sizes of 9,000 tons to 12,000 tons. A ship is understood to have fixed 10,000 tons of base oils Singapore to Houston in combination with a further 7,500 tons Singapore to Rotterdam. Some part-cargo space is available to Europe following the recent fixture of acetic acid from China to Antwerp-Rotterdam-Amsterdam. Further acetic acid is being quoted into the Mediterranean. Biodiesel is very active to Europe, and 10,000 tons of cyclohexane was quoted from Map Ta Phut, Thailand. Nineteen thousand tons of sulphuric acid was fixed from China to Walvis Bay, Namibia, and a further 19,000 tons was quoted from Isabel, Philippines, to Morocco. Three thousand tons of base oils were attempted from Rayong, Thailand, to Alexandria, Egypt.
Regular space in the regional market along the India and Middle East Gulf route seems to be pretty tight thanks to heavy contractual nominations this month. Quite a lot of benzene and pyrolysis gasoline has been seen in India and the Middle East Gulf lately, while parcels of base oil, styrene, caustic, linear alkyl benzene, ethylene dichloride, glycol and methanol are going back the way. Eastbound space is thin for July, with just a couple of the scheduled carriers having some space left after contractual nominations. Westbound has been active with paraxylene and benzene moving to Europe or the U.S. and Mexico. Twelve thousand tons of benzene, toulene, and xylene was heard to be fixed from Sikka, India, to Mediterranean-Antwerp-Rotterdam-Amsterdam in the mid- to high $60s/t, for example. Fifteen thousand tons of paraxylene was fixed from the Red Sea to Sines, Portugal at a level reported to be in the mid- to high $40s/t.
This report was originially featured in the July 4 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.