Business has been reasonably active across the majority of U.S. trade lanes this week. Several European routes enjoyed a busy week, but others were left dangling. Asia was quiet due to the holidays.
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Methanol made a big splash on routes to Asia this week. Forty thousand tons was fixed from Point Lisas, Trinidad, to China at $1.9 million (although the ship ballasted across from the Adriatic) and several further cargoes were quoted from Point Lisas and Jose, Venezuela. Beyond that, there was not much excitement, thanks partly to the Chinese New Year and partly because of product shortages. So far, owners are sticking to their freight ideas of $70 per metric ton for 5,000-ton parcels to Asia, but there are a couple of vessels with February space and traders will probably be testing their resolve this week. Base oils were quoted to Asia, with one cargo from Paulsboro, U.S., subject to tender award, and another one from Pascagoula, Mississippi.
There has been a steady, eclectic mix of cargoes moving eastbound along the transatlantic route. Some traders were talking of styrene to the Mediterranean and Antwerp-Rotterdam-Amsterdam, but it is doubtful anything was booked. Three thousand tons of cyclohexane was worked from Port Neches, Texas, to Antwerp-Rotterdam-Amsterdam in the mid- to high $60s/t, while 4,000 tons of used cooking oil from Newark, New Jersey, to Immingham, England, reportedly fixed in the low $70s/t. Parcels of monoethylene glycol, nonene, vinyl acetate monomer and ethanol were also noted, with more large cargoes of methanol from the Caribbean across.
Vegetable oil has been one of the busiest commodities along the Caribbean route this week, with cargoes moving from Norfolk, Virginia, and New Orleans, Louisiana, into the Caribbean, with further shipments from the Caribbean and the west coast of Central America. Traders are studying the possibility of placing base oils into Colombia from the U.S. Gulf.
The trend for the route into the east coast of South America is still for higher rates into Brazil on the back of the chlor-alkali plant stoppage, with a further shipment of 13,000 tons of ethylene dichloride fixed from Freeport, United States, in the low $60s/t. Ethanol, methanol, urea ammonia nitrate and paraxylene continues to be quoted as well, keeping space limited.
It has been quiet on the chemicals front on the India and the Middle East Gulf route this week, although base oils and ethanol are still talked.
Prompt space remains relatively scarce along the North Sea and Baltic route, which is demonstrated by the number of times that cargoes have come into the market, only to be postponed to later dates because there is not enough suitable tonnage around on the desired loading dates. There have also been numerous relet cargoes, a clear sign that owners do not have enough spare tonnage within their systems to be able to substitute ships that are running late. Freights are starting to punch upwards in this environment. Base oils have been fairly active, along the coast and down from the Baltic.
Southbound cargo volumes have been maintained, allowing owners to quote fairly bullish freight levels. Base oils are among the list of cargo inquiries, mostly for producers but with a couple of spot fixtures to Turkey, Egypt and Bulgaria.
Northbound cargo demand has picked up a little, making it easier for owners to re-position their vessels back up out of the Mediterranean. Pyrolysis gasoline from Tarragona, Spain, has seen a couple of ships fixed in this way, with reportedly strong levels on one of these shipments. Aromatics have been moving from Italy and Portugal. Several wax cargoes have been done from Egypt and Italy, with base oils and alkylate also fixed from Italy.
More prompt space along the inter-Mediterranean route has opened up this week, with some vessels spending quite a bit of time at anchor. There seem to be better prospects towards the end of the month, with more aromatics, methanol, acid, vegetable oil and FAME being seen. Base oils actually had a reasonable week with a number of spot fixtures, and the product moving mainly to Turkey and North Africa.
Transatlantic rates have increased a little more on the westbound route, and with February space being tight they could increase further for cargoes that need prompt shipment. Several shipments of paraxylene were booked at around $40/t for 5,000 ton-lots, and $40/t was also paid for 5,000 tons of aromatics from Antwerp to Houston. A ship filled up with 25,000 tons of pyrolysis gasoline from Ghent, Belgium, and Rotterdam to the U.S. Gulf, averaging mid $30s/t. Other fixtures include wax, sulphuric acid, methyl tertiary butyl ether, aniline, acetone and toluene. Interestingly, several traders are looking at sending styrene back to the U.S. since it is so tight over there. Another almost revolutionary enquiry was for 12,000 tons of biodiesel from Le Havre, France, to New York. The European biodiesel market is being slaughtered by imports from Argentina, and now that the ban on Indonesian biodiesel imports has been lifted it may just be that European producers have to offload material where they can.
There is not much space from Europe to the Far East left for February or March, and charterers who went out looking for a ship to do 4,000 tons of chemicals to multiport discharge ended up having to split the cargo in two smaller lots on two ships, such is the shortage of space. Demand has been mostly quiet during the period of Chinese New Year, but there has been an attempt to fix a large slug of base oils from the Black Sea to Singapore.
Demand is mostly steady along the India and the Middle East Gulf route, while the usual carriers have some space available. A 5,000-ton parcel of base oils from Antwerp-Rotterdam-Amsterdam to the west coast of India was seeing offers in the mid- to high $60s/t, as guidance.
Asia was celebrating the Chinese New Year this week, and business took a step back. Not every ship has managed to cover the entire period and so there may be bargains to be had for prompt loading. There are certain caveats to that as some owners also view it as a money-making possibility, especially as there are cargoes being quoted still for February loading in which owners are invited to submit their preferred loading dates rather than the other way around. Further clues that the market is tighter than may be supposed is that there have also been cargoes quoted for over a week already without being fixed, and now the charterers have stretched the loading dates in order to snare more potential carriers. None of this is likely to impact heavily on freight rates once the holidays are over, when levels will be determined by whether fresh business appears or not.
There is still not much evidence of benzene moving on the transpacific export routes. Some of the regular owners still possess March space, but that said, owners are tending to be firm in their freight ideas and business is known to have been fixed at over $60/t for 5,000-ton parcels from Korea to Houston. There have been more ships than normal on the routes to Europe, and, although there is still space around, owners are generally able to fill their ships, if not from Northeast Asia, then from Southeast Asia. Failing that, they look to load out of India, the Middle East Gulf or the Red Sea on the way, and realistically, there is very little difference in freight for 5,000-ton parcels, whether loaded in Korea, Thailand or India. Base oils in the amount of 7,600 tons have been quoted from Singapore to Rotterdam for the first half of March. Cargoes of biodiesel and acetic acid have been booked from China, and there are still plenty of smaller parcels quoted into the Mediterranean.
Things remain busy in the regional markets along the India and the Middle East Gulf route, with even small parcels of clean petroleum paying high levels. Fourteen thousand tons of easy chemicals were fixed from Qatar to two ports on the west coast of India at $31/t. Base oils have been very active out of Jeddah, Saudi Arabia, and Yanbu, Saudi Arabia, with two ships believed to be loading a total of up to 35,000 tons of base oils to India and the Middle East Gulf still within February. Rates are said to be in the upper $30s/t. Eastbound has been rather slow due to the holidays, although from the fixtures seen so far, rates appear to be steady. Westbound does have prompt space, but there have also been a number of cargo possibilities, including sulphuric acid, benzene, pyrolysis gasoline, paraxylene, caustic, glycol and ethanol.
This report orginally appeared in the Feb. 21 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.