The U.S. market is coping better with the mayhem caused by falling feedstock and commodity prices than other areas such as Europe and Asia. Asia in particular has experienced a very slow week, but this may also be partly due to holidays in the region.
Demand seems to be moderate, though several ships are still looking for completion cargoes into the Caribbean which has the effect of anchoring freight rates. One thousand one hundred tons of two grades base oils were quoted from Houston to Cartagena, Spain, for prompt, while others have 1,200 tons of three grades base oils Houston to Cartagena, Spain, for the second half of June. Several large lots of ethanol have been worked into Colombia and Jamaica, and a couple of caustic shipments have occurred, one going to Canada and the other looking for vessel space into Jamaica. Molasses and vegetable oils have also been active in the region.
Ethanol saw some dealings to South America last week, though not all the requirements finalized. However, 22,000 tons to 23,000 tons of ethanol was booked from the U.S. Gulf to North Brazil in the high $40s, low $50s per metric ton, which is a bit higher than previously. Two thousand seven hundred tons of base oils from Pascagoula, Mississippi, to Rio de Janeiro were covered. A couple of ships were detected having done paraxylene cargoes from the U.S. Gulf to Suape, Brazil. A parcel of palm oil was booked from Santa Marta, Colombia, to Santos, Brazil.
The transatlantic route is attracting a reasonable amount of demand, and there is not a great deal of prompt space around. Traders are looking at styrene again to Antwerp-Rotterdam-Amsterdam, as well as into Turkey. Several shipments of ethanol concluded from the U.S. Gulf to Antwerp-Rotterdam-Amsterdam, with a further cargo fixed into the Thames and another one done to West Africa. A fresh requirement of 12,000cbm of ethanol was quoted from Mississippi to Lagos, Nigeria, and Tema, Ghana, and a small parcel of ethanol was circulated from Houston to Gebze, Turkey. Traders have been looking at caustic into the Baltic, and 7,500 tons of used cooking oil was seen from the U.S. Atlantic Coast to Rotterdam. Eleven thousand tons of cumene concluded from the U.S. Gulf to Antwerp, seemingly in the low $40s/t. Several cargoes of glycol were noted fixed from the U.S. Gulf to Antwerp-Rotterdam-Amsterdam with a further 5,000 tons of glycol being studied from the U.S. Gulf to Baltic. Forty thousand tons of methanol from Beaumont to Antwerp-Rotterdam-Amsterdam is rumoured to have gone in the high $20s/t.
Styrene has flooded along the Asia route, with traders competing for various stems from the Mississippi and Houston to Taiwan and Korea. China has been expressly avoided due to the uncertainty with regards to the tariff situation. Ten thousand tons of ethylene dichloride was seen from the U.S. Gulf to Japan or Korea or Taiwan for the second half of June. A large slug of methanol was booked from Point Lisas, Trinidad and Tobago, to China. Thirty-one thousand five hundred tons of yellow grease and lard was quoted from Houston and New Orleans, Louisiana, to Singapore for mid-June.
Demand to the Middle East Gulf and India seems to comprise of the usual products, with traders looking at 10.000 tons to 15,000 tons of ethylene dichloride from the U.S. Gulf to the west coast of India for July, with a smaller lot of 5,000 tons to 8,000 tons of ethylene dichloride seen for June loading. Five thousand tons of styrene was noted from Houston to Mumbai for June, and 1,000 tons of butanol was seen from Houston to the west coast of India for mid-June.
The past fortnight has not been very productive in terms of new business to the North Sea and Baltic, and although prompt open space is not excessive, owners have been finding it hard to construct a decent program for their vessels. Contractual volumes have been steady, and spot biofuels have contributed heavily to keeping the vessels on the move. There have also been slightly more blending components around but fewer cargoes of aromatics and styrene. Base oils have been a bit busier out of the Baltic.
Demand southbound has been fairly consistent, but there have been a number of larger vessels on berth, scooping up parcels, as well as a heavy presence of Mediterranean-based tonnage which has kept rates under pressure. Base oils have been one of the busier commodities, while caustic, ethylene dichloride, orthoxylene, methyl tertiarybutyl ether, benzene, styrene, FAME and acrylonitrile have all yielded fixtures.
Owners have had to scratch around a lot more vigorously to fill their ships for northbound routes over the past couple of weeks. There have not been many of the usual aromatics from Italy, while Turkish exports have remained mostly within the Mediterranean, with just the acrylonitrile going to Portugal and cutterstock to Antwerp-Rotterdam-Amsterdam. A decent slug of caustic was booked into Sweden and a very unusual shipment of base oils was booked into the Baltic from Spain. Seven thousand five hundred tons of base oils were under consideration from Kavkaz, Russia, to Antwerp-Rotterdam-Amsterdam.
Owners are generally able to avoid having prompt open space across the Mediterranean, but with Turkey and North Africa celebrating the end of Ramadan, the prospects look tough for the week ahead. Biodiesel is still well in front in terms of demand, but there have been some intriguing movements, such as caustic being fixed into the Black Sea from Lavera, France, at the same time as caustic is being attempted out of the Black Sea. The latest lifting of paraxylene from Kulevi, Georgia, went to Sines, Portugal, rather than a deep-sea destination. Base oils have provided several opportunities, and methyl tertiarybutyl ether has been a touch busier, but benzene and pyrolysis gasoline has been almost non-existent.
Spot volumes are still subdued on the westbound route. A few tentative questions have been asked about aromatics, and several outsiders have managed to squeeze on berth, but owners explain that the cargoes have been typically large lots of acid, urea ammonia nitrate, caustic and base oil. Traders managed to cover one cargo of methanol from Marsa, Malta, to the U.S. but have been targeting Brazil with the latest requirement.
The route is looking a little overcrowded, with several extra vessels managing to push on berth in competition to the regular owners. Rates have slipped for traded cargoes such as styrene but are maintained for the smaller parcels. Two thousand nine hundred tons of chemicals Rotterdam to Vietnam for example were heard to have gone in the high $130s, low $140s/t. There is a mixture of requirements around, with yet more styrene for June, a couple of 5,000-ton parcels of what appears to be mixed xylenes, as well as smaller lots of nonene, octene, intermediates and alpha olefins. Fifteen thousand five hundred tons of base oils fixed from the Black Sea to the Middle East Gulf and Singapore and a further shipment of perhaps 10,000 tons was fixed to Singapore from the Baltic.
Several ships worked base oils from the Black Sea into India, and more base oils were quoted into the Middle East Gulf. Styrene, acrylonitrile, hexane, methanol and acid also accounted for some space.
There has been a distinct lack of aromatics into China over the past couple of weeks. Paraxylene in particular has been slow which suggests Chinese buyers are sourcing domestic material instead. Some cumene, phenol and acetone have been quoted into China while 5,000 tons of mixed xylenes was noted from Japan to Korea. There was even 4,000 tons of styrene shipped out of Zhangjiagang, China, to Daesan, South Korea. Generally, the route feels soft.
There have been some opportunities southbound over the past week or two, notably with methanol, methyl tertiarybutyl ether, caustic and base oils. Two thousand tons of base oils from Ulsan, South Korea, to Manila, Philippines, finally looks to have fixed after several weeks of trying, and at levels that are reported to be only $40-42/t, so well worth the wait. A little more clean petroleum has been noted from Maoming, China, and Yosu, South Korea, into Southeast Asia. Five thousand tons of alpha olefins continue to be quoted from Daesan, South Korea, to Singapore and 3,000 tons of toluene was seen from Kaohsiung, Taiwan, to Singapore. Ten thousand tons of ethylene dichloride was quoted from Yosu, South Korea, to Map Ta Phut, Thailand.
The flow of aromatics has been reduced, which is potentially damaging to the northbound route. Contractual volumes of paraxylene are clearly moving, and there have been spot shipments from Singapore, Tuban, Indonesia, and Kerteh, Malaysia. Glycol volumes are healthy, but contractual only and rarely on the spot. Some spot volumes of base oil were noted from Singapore and Si Racha, Thailand.
Spot demand between Southeast Asia is slow, and with holidays in the Muslim countries, it is not going to improve for a while. Twenty-four thousand tons of base oils were booked from Singapore to Hong Kong for mid-June. Several regular shipments of pyrolysis gasoline, paraxylene and benzene were noted.
The benzene arbitrage is still open on the transpacific route to the U.S., with both June and July cargoes quoted, with rates so far unchanged. Ten thousand tons of mixed xylenes was also noted from Korea to the U.S. Gulf. There is still interest in shipping sulphuric acid to Chile with levels reportedly back up to $70/t. Ten thousand tons of biodiesel two ports in Korea to two ports in the west coast of the U.S. fixed in the mid $90s/t. The market to Europe is not as tight on space as earlier. Aside from the various small parcels of chemicals and base oils into the Mediterranean, most of which do not excite owners, there has been interest in shipping methyl tertiarybutyl ether, with cargoes noted from China and Singapore. Biodiesel is seemingly in short supply in Southeast Asia due to domestic offtake, though several cargoes were booked to Europe. Further shipments of used cooking oil have been seen, with 20,000 tons booked from Port Klang, Malaysia, and Pasir Gudang, Malaysia, fetching mid $60s/t and 10,000 tons fixed to the U.K. in the low $70s/t basis two to two. Eighteen thousand five hundred tons of sulphuric acid from Onsan, South Korea, to Bandirma, Turkey, fixed at $56/t.
The week-long Eid al-Fitr celebrations have greatly reduced demand in the India and Middle East Gulf markets. Eastbound business is quiet too.Some styrene, base oil, paraxylene, methyl tertiarybutyl ether and ethanol cargoes were noted, with 10,000 tons phosphoric acid from Aqaba, Jordan, to Isabel, Philippines, still quoted.Westbound is fairly firm, with 10,000 tons of easy chemicals from the west coast of India to Antwerp-Rotterdam-Amsterdam seeing rates in the low $70s/t. Traders are looking at benzene from India to the U.S. Gulf.
This report was originally featured in the June 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 firstname.lastname@example.org +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.