Chemical exports out of the U.S. are running at a reasonably steady pace. Europe and Asia, however, are both considered to be quieter than normal.
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The Caribbean market is largely unchanged. Several caustic shipments have taken place to Barranquilla, Colombia, and Mexico and there has been some urea ammonia nitrate moving into the U.S. Gulf and the west coast of the U.S. from Trinidad.
Business is reasonable on the southbound route. Several ships have loaded ethanol cargoes into Brazil from the U.S. Gulf, and the next lifting of 8,800 tons base oils from the U.S. Gulf to Brazil is already being quoted for July. Eighteen thousand tons of ethylene dichloride is reported to have been booked from Point Comfort, Texas, to Maceio, Brazil, and Aratu, Brazil, and some caustic is being attempted into Brazil from the U.S. Gulf. The next liftings of paraxylene, styrene and acetic acid to Brazil are under discussion for July, while some 30,000 tons of urea ammonia nitrate was covered from Mississippi to Argentina.
Freight levels are being sustained through a steady flow of eastbound cargoes. Twelve thousand cubic meters of ethanol fixed from New Orleans, Louisiana, to Rotterdam, Netherlands, at $50 per metric ton, with the option of Thames discharge said to be high $50s/t. Fifteen thousand tons of caustic is believed to have finally fixed from the U.S. Gulf to Kotka, Finland, but still leaves 5,000 tons to be covered from Freeport, Texas, to Antwerp, Belgium.
Others fixed 18,500 tons of caustic from Point Comfort to 2-Sweden, reportedly in the low $50s/t. Twenty thousand tons of methanol concluded from Point Lisas, Trinidad and Tobago, to the west coast of the United Kingdom, and 11,000 tons of cumene was again circulated from Pascagoula, Mississippi, to Antwerp.
Four thousand tons of chemicals were noted from Mississippi to Antwerp-Rotterdam-Amsterdam and 1,270 tons of chemicals were mentioned from Houston, Texas, to Rotterdam. Twelve thousand tons of metaxylene fixed from Texas City, Texas, to Algeciras, Spain. Ten thousand tons of ethylene dichloride from the U.S. Gulf to Tarragona, Spain remains uncovered, and assorted traders continue to look for space U.S. Gulf to Turkey for styrene and glycol possibilities. Eight thousand tons to 12,000 tons of caustic has been quoted from the U.S. Gulf to Durban, South Africa, while questions have been asked about 12,000 tons of ethanol from the U.S. Gulf to Lagos, Nigeria, for July or August shipment.
There has been plenty of talk of styrene to Korea and Taiwan, but since little June space remains, hardly anything new has actually been worked. A few traders are also introducing China as a possible destination. The last couple of fixtures to Korea were done in the high $50s/t for 5,000-ton parcels, but these levels are being surpassed by talk of low $60s/t. Traders are looking for a vessel to take 11,000 tons of ethylene dichloride from the U.S. Gulf to Vietnam. A couple of traders are looking to cover 13,000 tons of ethanol from Houston to Subic Bay, Philippines, with several further ethanol cargoes seen to Korea and Far East for July loading.
In a rather dull week along the India and Middle East Gulf routes, traders went out with 12,000 tons base oils from Paulsboro, New Jersey, to the west coast of India for end June loading, but this requirement is now thought to be on a back burner.
It has not been a productive week for most owners along the North Sea and Baltic routes. Contractual nominations are doing well by all accounts, but the spot market continues to lag behind. Pressure is therefore being applied to spot freights, with accusations flying around about heavy discounting taking place. Cargo-wise, biofuels have taken the top slot again, and finally a few more aromatics such as pyrolysis gasoline and benzene have been noted from the Baltic. Six thousand tons of C7 from Dunkirk, France, to Antwerp achieved in the region of $90,000, which is unchanged from previous shipments.
It has not been a busy week into the Mediterranean, and charterers have not experienced any particular issues in finding suitable space. Two thousand tons of base oils from Le Havre, France, to Haifa, Israel, went for around $175,000 while 5,000 tons of biodiesel from Rotterdam to Venice, Italy, achieved $255,000. Parcels of paraxylene, caustic, ethanol, methyl tertiarybutyl ether, methanol, vegetable oil and adblue have been viewed making their way into the West Mediterranean.
It is a stable market going up to Continental Europe. Routine cargoes have been paying standard rates, such as 4,000 tons of toluene from Priolo, Italy, to Antwerp-Rotterdam-Amsterdam which went for 200,000. Some glycerine was done from Spain and a couple of aromatics parcels were fixed from Leixoes, Portugal. Four thousand tons of base oils were quoted from Augusta, Sicily, to Rotterdam and biodiesel was seen from Ravenna, Italy, and Spain.
Open space is plentiful in the Mediterranean, especially prior month-end. Biodiesel has been a little busier, with cargoes noted into France, Spain and various Italian ports, as well as a shipment into the Black Sea that was fixed. Better volumes of methyl tertiarybutyl ether and ETBE are noted, with 5,000 tons fixed into the Adriatic at 155,000, and another 5,000 tons fixed into the Black Sea at $30/t. Base oils have been represented by shipments into Algeria, Turkey, Israel, Morocco and Egypt.
Interest in shipping benzene westbound continues to be heard though only a few fixtures are known so far. Pyrolysis gasoline too has seen some interest, with 15,000 tons fixed out of the Baltic. Paraxylene has been booked from Gonfreville, France, with further volumes quoted from the Baltic and Mediterranean. A massive refinery fire in Philadelphia has caused clean petroleum rates to surge to WS 160, up from WS 125 prior to the fire. Apart from reducing the amount of competition from medium ranges for chemical parcels, there may also be more gasoline blendstock components to be shipped in smaller parcels transatlantic.
Four thousand tons of base oils are believed to have fixed from the Baltic to the U.S. Gulf. Four thousand tons of caustic was quoted from Rotterdam to Houston, with more caustic pushed into Canada. Ten thousand tons of FAME was noted from Hamburg to the U.S. Atlantic Coast and 8,000 tons of calcium chloride was seen from Antwerp to the U.S. Atlantic Coast.
Renewed interest in sending styrene to Asia has provided some opportunities this week, the rates for which have been in the low $80s/t for 5,000 tons, depending upon the ports in question. Five thousand tons of paraxylene is under consideration to China from the East Mediterranean. Ten thousand tons of methanol was noted from Arzew, Algeria, to China, with others studying 20,000 tons of methanol from Kulevi, Georgia, to China.
A busier week for base oils along the India and Middle East Gulf routes with a prompt requirement of 4,000 tons to 6,000 tons noted from Kavkaz, Russia, to India, and 2,200 tons quoted from Europe into Fujairah, United Arab Emirates, and Jebel Ali, United Arab Emirates, for mid-July. Eight thousand tons of base oils were also booked from Cartagena, Spain, to Mumbai, India, on a spot basis.
Spot demand to northeast Asia has been slow and there are still June positions to be covered. A few base oil enquiries emerged for China and Taiwan, while some toluene, styrene and paraxylene was quoted into China. Five thousand tons of mixed xylenes and 1,000 tons of solvent naphtha C9 was circulated from Korea to Taiwan. A number of smaller clean petroleum cargoes have been seen as charterers look for ways to avoid paying the booming freights in the medium range sector.
There has not been a great deal quoted southbound. Some caustic was mentioned, and smaller clean petroleum cargoes too. Three thousand tons of soybean oil from Beihai, China, to Hong Kong was still circulated and some pyrolysis gasoline was noted from Mailiao, Taiwan, to Singapore for prompt loading.
Owners have managed to cover most of the outstanding end June positions along the northbound route, but freight levels are soft. A few more paraxylene possibilities have been seen from Thailand, but only for July shipment. Five thousand tons of pyrolysis gasoline was quoted from Thailand to Ulsan, South Korea, and more pyrolysis gasoline was seen from Pasir Gudang, Malaysia. Five thousand tons of solvent naphtha C9 was circulated from Map Ta Phut, Thailand, to China and 6,000 tons of unconverted oil was noted from Bangkok to Ulsan. More PME and fatty alcohol is under discussion into China.
The week has seen little spot activity into southeast Asia, which has the effect of keeping downwards pressure on freights. Seven thousand tons of pyrolysis gasoline was seen from Batangas, Philippines, to Singapore and 3,000 tons of toluene was noted from Dongguan, China, to Bataan, Philippines. Clean petroleum has been one of the few consolation cargoes for owners. Even the transhipment parcels that were quoted ended up being covered quickly.
Benzene remains active on the Transpacific route, and given the length in Asian supply and product shortages in the U.S. this situation looks set to continue for a while longer. Space looks to be tight too for July. Several large cargoes of benzene have been seen from Korea to the U.S. Gulf and cargoes of alkylate and reformate are also under discussion. Two thousand tons to 3,000 tons if 2-ethylhexanol was seen from Ulsan to Altamira, Mexico, and 3,000 tons toluene and xylene was quoted Ulsan to Colombia or the U.S. Gulf. Three thousand five hundred tons of base oils were noted Korea to the U.S. Gulf.
Several ships have part-cargo space for July from Asia to Europe. Biofuels have brought some of these ships on berth. Five thousand five hundred tons of base oils were booked from Malacca, Malaysia, to Antwerp, allegedly in the low $80s/t. Six thousand tons of benzene was quoted from Map Ta Phut to Tarragona. Small chemical parcels have been fixing into the East Mediterranean at usual levels.
The situation in the regional markets is very messy. The imposition of Extra War Risk Insurance premiums affects all vessels on all routes in and out of the Middle East Gulf and is probably the single major issue affecting trade. Figuring out the cost is very difficult, however, and makes comparing freight levels from one vessel to the next very complicated, with various factors needed to be taken into account. It certainly seems to be discouraging both owners and charterers right now.
On top of that, several Indian ports remain heavily congested after the disruption caused by cyclone Vaayu last week. Eastbound is generally quiet. Methanol is one of the primary products. Eight thousand tons of base oils were quoted from Al Ruwais, United Arab Emirates, to Ulsan while 6,000 tons of base oils from Yanbu, Saudi Arabia, to Kolkata, India, were heard to have gone on subjects at just under $500,000. Westboundhas produced some fixtures of caustic, methanol and methyl tertiarybutyl ether.
This report was originally featured in the June 19 edition of Lube Report Americas.
Adrian Brown, 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.