The situation on the Houston Ship Channel influenced all the routes out of the United States last week, and for the foreseeable future too. Following a successful trial run over the weekend using a small tanker, a restricted number of vessels have been permitted to move in daylight hours, with the first night passages now being attempted. The Houston Pilots advised that as of this morning they have 35 arrivals and 25 departures, of which 24 are sailing from above the zone and 32 need to pass through it inbound. A total of 52 ships moved yesterday, 29 inbound and 23 outbound (16 transiting inbound and 10 sailing out through the restricted area).

It has been a very messy picture into Asia along the Far East route. On one hand, there are ships that have been cancelled on cargoes that were expected to load from Houston and which have been showing prompt space at very competitive levels. On the other side of the coin are owners whose ships are not quite as critically positioned, asking some 50 percent higher freights than those prompt owners. In effect, therefore, rates can be as low as $55 per metric ton for 5,000-ton parcels, or they can be $70/t, with fixtures done at both ends of the spectrum. Styrene may still be a possibility, along with ethylbenzene and xylene. Ethanol also seems to be going, and some ethylene dichloride was quoted from Freeport, U.S.

Traders have been sizing up opportunities to send benzene to Europe along the transatlantic route, given the price differentials between the U.S. and Europe, even looking to send the material into Spain, but it is still unclear if any has been fixed so far. Some of the styrene stems that were supposed to have gone to Asia have been turned around and sent to Europe. Ten thousand tons of styrene was heard to have fixed from the U.S. Gulf to Antwerp-Rotterdam-Amsterdam at $55/t. Glycols have again been talked into Antwerp-Rotterdam-Amsterdam and on the U.S. Gulf to the Mediterranean route for April shipment. Traders continue to look at small parcels of ethanol from the U.S. Gulf to Antwerp-Rotterdam-Amsterdam, and there seems to be more used cooking oil going from the U.S. Atlantic Coast to the U.K. continent. A cargo of base oil looks to have fixed from the U.S. Gulf to Lagos, Nigeria.

Owners are holding back from offering on any cargoes for future voyages into the Caribbean if their ship is still in the Houston area. Two owners commented that they will wait until their ships depart, as otherwise there is no way to know what their dates will be for their next voyage. A couple of owners are sporting their first half of April space and are keen to book, but charterers appear to be withholding from putting Houston area cargoes in the market to avoid the imminent demurrage exposure. There is a tender for 2,000 tons of base oils from Houston to Rio Haina, Dominican Republic, for the first half of April, and a trader has been quoting parcels of methyl ethyl ketone, styrene and acetone from Houston to the east coast of Mexico for next available timing. There was also talk of a caustic combo to Haiti and Rio Haina.

Southbound trade along the route into the east coast of South America has been strong, particularly with ethanol movements, of which there have been several. Nine thousand tons of base oils fixed from Houston to Rio de Janeiro, and a fresh requirement of 3,500 tons of base oil is looking for early April space. Several parcels of ethylene dichloride were quoted to Aratu, Brazil, and Maceio, Brazil, and traders expect more movement of paraxylene to Suape, Brazil. Several ships have fixed cargoes of sulphuric acid from Santa Rosalia, Mexcio, down to Chile.

There have been further ethanol fixtures to India. Styrene to India is also deemed a possibility, according to traders, and a shipment of around 15,000 tons of base oil was fixed from Pascagoula, Mississippi, and Port Arthur.

Europe

Trade along the North Sea and Baltic route was in fact busier in the previous week than in the week just gone. Owners were able to make some progress towards fixing their ships past the first week of April, but then new business fizzled out, leaving the majority of vessels clinging to five to ten days worth of forwards employment only. Consequently, rate aspirations took a knock, with levels staying flat instead of rising, as had seemed a possibility earlier on.

Southbound demand has remained fairly robust into the Mediterranean, and rates are holding. Several cargoes of caustic were noted moving to Spanish ports, to which ethylene dichloride was also being directed. Biodiesel saw several larger cargoes go to Spain, while 6,000 tons of the grade fixed from Antwerp to Venice at $270,000. Several shipments of base oil were lined up to go to Turkey, with more base oil fixed to Egypt from Le Havre, France, and a further enquiry for 7,000 tons to Vado, Italy. Sixteen thousand tons of base oils were fixed to Valencia, Spain, and Alexandria, Egypt, at $550,000, but subjects failed, and the cargo has since been re-issued as 9,750 tons. Parcels of orthoxylene, aniline, styrene, hexene, ethanol, methyl tertiary butyl ether, paraxylene, xylene and acetic were also noted.

It might not be as busy as the southbound route but there is not a great deal of prompt space around on the northbound route. A cargo of linear alkyl benzene and paraffins was attempted from Italy to the U.K. continent, the aim being to have the cargo arriving in the U.K. prior to the original Brexit date of April 12, but nothing could be found that was prompt enough. However, rates on the cargoes that are heading back up show that there have been no notable increases on the smaller parcels. Larger cargoes however have been setting a firmer trend, such as 15,000 tons of naphtha from Vado to Antwerp-Rotterdam-Amsterdam which collected $400,000.

Along the Inter-Mediterranean route, prompt space has been infrequent, but numbers have not really increased either. Bad weather is partly responsible for the shortage of space, with ships stuck in some Italian and Spanish ports for five to six days. Two thousand seven hundred tons of cumene from Temryuk, Russia, to Venice finally got fixed after four to five weeks of trying to secure space. Methanol should be seen again from Marsa, Algeria, later in the month, but all the Kulevi, Georgia, material is being handled by in-house tonnage.

Activity is reasonable on the westbound transatlantic route. Fifteen thousand tons of paraxylene fixed and failed to Rotterdam and Charleston at $27-$28/t but could re-emerge on later dates. Several other traders are pushing paraxylene possibilities. Toluene is considered workable, with a cargo booked from Leixoes, Portugal, and more quoted from the Mediterranean. FAME, wax and sulphuric acid are cargoes being shipped across from Hamburg. Traders say methanol has potential to ship, and there is the suspicion that gasoline components are going from the Baltic. MDI was noted Antwerp-Rotterdam-Amsterdam to Houston, and some small parcels of base oil and acetate were seen. Trade continues to ramp up into Canada, with more urea ammonia nitrate fixed into Three Rivers and Hamilton.

Fewer requirements in general have been seen into the Far East over the past week, with all the scheduled carriers having some space left later in April. Base oil enquiries have become more frequent, while styrene shipments have tailed off. Between 10,000 tons and 12,000 tons of rapeseed oil from Sete, France, to Shanghai is probably a consequence of the Chinese no longer buying Canadian canola.

Apart from some possible mixed xylenes and methanol fixtures, most requirements into India and the Middle East are under 5,000 tons, even if there are a reasonable number of them out there.

Asia

It was much quieter in the domestic market last week, with fewer shipments of paraxylene heading to China, at least on a spot basis, though contractual deliveries are sustained. The start-up of a huge new paraxylene plant in China may be the reason, while high inventories of material and plant turnarounds in the region could help explain the trend. Usual base oil movements have been seen from Korea to China, and 2,000 tons of base oils were quoted from Onsan, Korea, to Godau, Vietnam, and a further 2,000 tons of base oils were noted from Ulsan, Korea to Manila, Philippines. A steady stream of heavy aromatics, paraxylene and pyrolysis gasoline are available from Southeast Asia, as well as a couple of 10,000 tons slugs of biodiesel into China. In Southeast Asia, traders continue to look for space able to take parcels of paraxylene, pyrolysis gasoline and benzene. The intra-Singapore harbor trade has been busy with a string of requirements noted. There is a feeling that contractual space is tight and that some cargoes are spilling out onto the spot market. Base oils are under discussion from Singapore to destinations in Vietnam. Three thousand tons of styrene was quoted from Merak, Indonesia, to Butterworth, Malaysia.

Demand remains strong on the transpacific export route, with almost all April space booked, and some owners only able to offer May or June sailings. Benzene and mixed xylenes are reckoned to be workable. Sulphuric acid is seen to Chile for April and May, with levels in the mid $60s/t talked for 30,000-ton cargoes. Acid is also on the menu to Europe, but the main commodity in this direction has been various grades of biofuel. Benzene has been another possibility, with cargoes noted from Singapore and Map Ta Phut, Thailand, with levels ranging from low $70s/t and upwards. Three thousand tons of styrene was quoted from Merak to Turkey.

Whilst there are still many cargo enquiries circulating in the regional markets, the total volume along the India and Middle East Gulf route is lower than in recent weeks. A few more ships are around towards mid-April too. Contractual volumes have been healthy on the eastbound leg, meaning little spare space on the scheduled carriers. Spot volumes have not been as plentiful however, at least from the Middle East Gulf, although there are plenty of aromatics quoted from different ports in India. Westbound space is still essentially tight, and rates are firm. Benzene is starting to appear, and there have been the usual shipments of styrene, MTBE, methanol, glycol, acetic, vinyl acetate monomer and base oil.

This report was originally featured in the April 3 edition of Lube Report Americas.

Adrian Brown is a senior market analyst for chemicals and base oils with SSY Shipbrokers, London, can be reached atfix@ssychems.comor +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.