The United States markets are largely stable but will be tested over the next week or so due to the American Fuel and Petrochemical Manufacturers event in San Antonio, Texas. European demand has improved somewhat, whereas that of Asia has declined slightly.
Contractual volumes to the Far East are mostly strong, and spot rates had been expected to climb further, except there has suddenly been some space opened up for both March and April. However, it might simply be an owner looking to cover the AFPM period. Traders had expressed interest in paraxylene, though the arbitrage seems slender at best. Five thousand tons to 10,000 tons of ethylene dichloride was seen from the U.S. Gulf to China, and 30,000 tons to 40,000 tons of caustic was quoted from the U.S. Gulf to Gladstone, Australia. Ten thousand tons of vegetable oil fixed from New Orleans to Korea in the low $50s per metric ton, and further vegetable oil cargoes were noted.
Styrene is understood to have been fixed on the transatlantic route to Europe on several occasions by one trader, while another is reputed to have taken a styrene and ethylbenzene combination from the Mississippi to Antwerp-Rotterdam-Amsterdam in the low $60s/t. Several parcels of styrene have also been talked into Turkey. A cargo of cyclohexane is believed to have fixed from Port Arthur, Texas, to Antwerp-Rotterdam-Amsterdam, and a cargo of biodiesel was fixed from Mississippi to Gothenburg, Sweden. Also going into the Baltic is a cargo of tall oil from Mobile, Alabama. Four thousand cubic meters of ethanol was quoted from the U.S. Gulf to northwestern Europe for prompt, and a large cargo of methanol is claimed to have fixed from the U.S. Gulf at the end of March. A cumene tender was heard to have been awarded, and is expected to ship to Antwerp-Rotterdam-Amsterdam, which is separate from the 5,000 tons of cumene moving from Pasadena, California, later this month. A couple of ethylene dichloride enquiries were noted to Barcelona and Tarragona, Spain, from Freeport, Texas, and Lake Charles, Louisiana, respectively.
Freight levels to the Caribbean have been steady, reflecting the steady pattern of trade in the spot market right now. There is not a great deal of space around for March, nor are there many outsiders lined up to take on the business that has been quoted. A couple of vegetable oil shipments were booked from the U.S. Atlantic Coast to the Caribbean in the low $30s/t, which is pretty much the going levels for months already. A ship was booked to take the combination of ethanol cargoes to Jamaica and Colombia from the U.S. Gulf mid-month. Seven thousand five hundred tons of vegetable oil was quoted from New Orleans to Rio Haina, Dominican Republic, and Santo Tomas, Guatemala, for April 5 to April 20. A problem with an importer caused a flurry of excitement as the charterers looked at different ways to bring the cargo of palm oil into the Mississippi, including transhipping via Mexico.
Further shipments of ethanol have been identified going to Brazil from the U.S. Gulf. Base oils too have given owners something to chew on, and there was some palm oil fixed from the Caribbean into Santos, Brazil. Traders continue to talk of base oils from Brazil, with the possibility that a cargo was booked into the Middle East.
There has been a good deal of interest to India from traders looking at sending cargoes of ethanol, ethylene dichloride, styrene and base oils, although the supply of cheap base oils is understood to be drying up which might eventually exert downwards pressure on freight levels.
It has been a busier week with an influx of new requirements to the North Sea and Baltic noted. Rates however have not registered any change, and instead all that seems to have happened is that the fleet has fixed a little further ahead, with a greater number of April positions now being seen. Biodiesel is certainly the most widespread of all enquiries, but there has also been more by way of aromatics. The need to get styrene out of a shore tank in France resulted in a couple of movements, and several late-running vessels provided a couple of prompt opportunities. A couple of base oil cargoes have been fixed out of Riga, Latvia, and Kaliningrad, Russia, and there has been an interesting cargo of very high-spec base oils fixed into Riga from Continental Europe. Strong winds caused major disruption last week, with pilots suspended in major ports such as Antwerp, Rotterdam and Le Havre, France.
Demand continues to build on the southbound route, so far without any repercussions on freight, though an increasing number of scheduled owners have no space left in March and it may only be a matter of time, should demand remain robust. Rates for 1,000-ton parcels into Turkey have edged up into the low $70s/t but levels into the West Mediterranean remain flat. Six thousand tons of pyrolysis gasoline from Dunkirk, France, to Priolo, Italy, for example was worked at a level of 194,000 (U.S. $220,275). A couple of base oil cargoes are believed to be under negotiation into Turkey and Egypt.
A steady flow of cargo had been reported northbound last week, but it is a real mixture of grades and commodities. The usual C5, aromatic oil and light cycle oil have been noted out of the East Mediterranean, with some FAME enquiring out of the Black Sea. A benzene cargo shipped to the Tees from Skikda, Algeria, and 5,000 tons of ETBE was done from Fos, France, to Donges, France, the first such lifting from Fos this year since all these requirements have recently been sourced from Antwerp-Rotterdam-Amsterdam.
Biodiesel has been a primary grade within the Mediterranean and has been welcomed by owners who see it often shipped from A to B and then immediately back from B to A. Double freight and no idle time or ballasting make these popular cargoes to have. Eight thousand tons of cumene fixed from Huelva, Spain, to Marghera, Italy, and almost immediately the next requirement has been quoted for April. It is expected that Spain will supply more of these through the year rather than importing them from the U.S. Base oil possibilities include deals into Morocco, Greece, Turkey and Egypt.
It continues to be a volatile market westbound on the transatlantic route, with freights varying greatly, depending upon exact loading dates. Some 5,000-ton parcels have been competitively booked at around $30/t, while others have been in the low-$40s/t. Ten thousand tons of methanol from Marsa, Malta, to New York obtained $72/t. More methanol has been noted from the Baltic to the U.S. Gulf, and several cargoes of pyrolysis gasoline, aniline, acetone, caustic, paraxylene, mixed xylenes and biodiesel have either been booked or are under negotiation. A combination of wax, lubes and chemicals was booked into the U.S. Gulf from Fawley, United Kingdom, and Rotterdam, the Netherlands. Eleven thousand five hundred tons of urea ammonia nitrate was pushed around Sluiskil, the Netherlands, to the U.S. Atlantic Coast and the U.S. Gulf, and more urea ammonia nitrate was quoted in anticipation of the opening of the Seaway navigation into the Lakes, which should take place during April. Ten thousand tons of normal paraffins were fixed from Algeciras, Spain, to Canada, and attempts have been made to sell mixed xylenes into Montreal.
Rates to the Far East remain firm, with only small amounts of completion space remaining in March. Many of the cargoes that had been around the previous week are still there to be covered. Shortages in Asia of some grades such as phenol, ketones and acrylonitrile could see some additional volumes come onto the market.
Demand to India and the Middle East Gulf is relatively stable, which has allowed some additional vessels on berth. With 16,000 tons of methanol now arriving in India from Arzew, Algeria, the next lifting of methanol has been discussed from Arzew, but is a smaller quantity of just 7,000 tons. Many of the small parcels of solvents that were quoted to Adabiya, Egypt; Jebel Ali, United Arab Emirates; and India remain uncovered, as do the base oils from the Mediterranean.
It has been a quieter week domestically, with far fewer cargoes of paraxylene being quoted into China. Benzene too is supposed not to support an arbitrage for imports into China, at least not from Korea, although a few enquiries were still detected. High product inventories in China are stifling the movement of some grades, such as glycols, while styrene plant turnarounds in the region have resulted in fewer coastal shipments. Northbound volumes from Southeast Asia are still impressive, whereas very little is being quoted in the opposite direction.
Space for exports remains scarce for both March and April on the transpacific route. Several traders have been trying 12,000-ton cargoes of benzene to the U.S. Gulf. Six thousand tons of mixed xylenes was also noted from Yosu, South Korea, to the U.S. Gulf for the first half of April, while small parcels of acetone and isopropanol have been studied. The market to Europe is very active on biofuels, with assorted quantities, load ports and discharge options quoted. Six thousand tons of base oils from Malacca, Malaysia, to Antwerp, Belgium, were booked at $75/t. Fifteen thousand tons of PME from the Straits to Spain and Antwerp-Rotterdam-Amsterdam went at $66/t.
If anything, it has been even busier than last week in the India and Middle East Gulf trades, with a lot of cargoes outstanding from earlier in the month, such as acetic acid, glycols, benzene, linear alkyl benzene, ethyl acetate, pyrolysis gasoline, methanol, caustic, acids, ethanol and ethylene dichloride. Eight thousand tons of base oils were reportedly fixed from Ruwais, U.A.E., to the west coast of India, and 7,000 tons of base oils are believed to have fixed from Sitra, Bahrain, to Mumbai, while some 14,000 tons of base oils are looking for a ship to go from the Red Sea to Port Suakhin, Sudan, and Hamriyah, U.A.E. Eastbound is also active with plenty of cargoes quoted, ranging in size from 1,000 tons to 20,000 tons. Traders continue to seek a vessel willing to load 6,000 tons of base oil from Al Ruwais, U.A.E., to China. Westbound remains busy. Further large caustic shipments appear to have fixed back into the Mediterranean. Twelve thousand tons to 15,000 tons of pyrolysis gasoline was enquiring into the Baltic. A cargo of methanol from Al Jubail, Saudi Arabia, to Rotterdam remains unfixed for the entire month. Cargoes of benzene are being attempted from India; Rabigh, Saudi Arabia; and Yanbu, Saudi Arabia. Eight thousand tons to 10,000 tons of vinyl acetate monomer was seen from Jubail, and various glycol requirements are noted.
This report was originally featured in the March 20 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.