Global activity has been suspended until China is back and fully operational again after the New Year holidays, at least, that is what everyone is hoping for. Time will tell.
Spot fixing from the U.S. Gulf to the Far East has been restricted to cargoes of methanol from the U.S. Gulf and Caribbean, and a couple of ethanol movements to the Philippines. Traders have expressed interest in shipping ethylbenzene and styrene to Asia, but it is probably too early for any deals to have been struck. Rates are roughly unchanged.
Some styrene has been talked to Europe, but at the same time the cargoes may be whisked away from the transatlantic route to Asia if the traders sense a better return in that direction. Small parcels of glycol have been noted to Antwerp-Rotterdam-Amsterdam, as well as small parcels of orthoxylene and cyclohexane. Eight thousand tons of cumene is believed to have fixed from Pasadena, Texas, to Antwerp. Traders are still looking at orthoxylene into the Mediterranean, and several glycol parcels were quoted into Turkey. A combination of neodol and neodene was quoted from Geismar, Louisiana, to Barcelona, Spain, and Gebze, Turkey. The regular shipment of 4,000 tons base oils was booked Houston to Naples, Italy.
Fog has closed the Houston Ship Channel on a number of occasions over the past week, causing vessels going to the Caribbean to bunch up and some to miss their laycans. Business is patchy, yet there is not a great deal of available space. Traders are looking at 1,600 tons three grades of base oils from Houston to Rio Haina, Dominican Republic, for end-February or the first half of March shipment. The requirement for 11,000 tons of caustic to Matanzas, Venezuela, has been postponed due to concerns over sanctions. Owners claim to have taken some caustic from the U.S. Gulf to the east coast of Canada for mid-February. Vegetable oil and palm oil remains busy into the Caribbean and within the Caribbean, as does ethanol.
Further shipments of ethanol to Brazil have been identified as taking place out of the U.S. Gulf and Mississippi, with more February cargoes being lined up along the route to the east coast of South America. Parcels of base oil and caustic are under discussion to Brazil, but the ethylene dichloride possibility to Brazil has not been seen again. Two thousand tons of base oils were quoted from Houston to Quintero, Chile, and further base oils were quoted into South America and Caribbean from Europe, suggesting issues with more usual supply sources. Seven thousand tons of palm oil fixed from Santa Marta, Colombia, to Santos, Brazil.
February space to India is scarce in the U.S. Gulf for February, with rates talked well into the $70s per metric ton. A couple of traders are looking at shipping 10,000-ton cargoes of ethylene dichloride to India for end February or early March. Further base oil possibilities have been seen to India, and there have also been some ethanol quotations to both India and the Middle East Gulf. Styrene is under discussion to India as an alternative to Asia or Europe.
The North Sea and Baltic market is still not as active as it ought to be, but there was at least a little progress last week, and ships have managed to fix a little further ahead. Bad weather and berthing delays may have been a contributory factor, but there was a little more movement on the clean petroleum side too, which has lent some support. Three thousand three hundred tons of base oils, comprising eight grades were reportedly fixed from Fawley, U.K., and two ports in Rotterdam to Naantali, Finland, for a lump sum figure of $175,000. It would appear there have been some exports of base oil from Liepaja, Latvia, and Kaliningrad, Russia, to the U.K. and Antwerp-Rotterdam-Amsterdam, but the largest volume out of Riga, Latvia, has been to West Africa.
Owners have expressed a little more satisfaction at the amount of enquiry on the southbound route, but acknowledge that rates remain depressed. For instance, 5,600 tons of base oils from Fawley to Vado, Italy, obtained $37/t, and 4,000 tons of pyrolysis gasoline from Dunkirk to Priolo, Italy, paid 43/t. Border disputes in the Crimea have generated some interest in shipping methanol and urea ammonia nitrate from Rotterdam and Rouen, France, to the Ukraine, which is a long way to bring material that is readily available locally within the Black Sea. There is a tender for 5,000 tons of methyl tertiarybutyl ether to Greece and several traders are looking at sending styrene to Turkey. Styrene has also been fixed into Berre, France, and Barcelona. Caustic has been booked into the Adriatic, Genoa, Italy, Spain and Portugal, with more quoted into Turkey. Ten thousand tons of biodiesel fixed from Antwerp-Rotterdam-Amsterdam to Varna, Bulgaria, with another 10,000 tons going to Constanza, Romania, with further biodiesel parcels quoted into Italy, France and Spain.
A moderate amount of cargo along the northbound route was pushed last week, but not in enough volume to cause rates to swing upwards. Five thousand tons of pyrolysis gasoline from Venice, Italy, to Antwerp-Rotterdam-Amsterdam paid $40/t, though the cargo will probably go to Barcelona for which the rate was $24/t. Several attempts were made to ship pyrolysis gasoline and heavy aromatics, along with light cycle oil and toluene from the Black Sea to Antwerp-Rotterdam-Amsterdam. A further shipment of alkylate fixed from Augusta, Sicily, to Antwerp-Rotterdam-Amsterdam. Some larger lots of biodiesel were circulated from South Spain, and 5,000 tons of biodiesel was booked from Varna to Rotterdam.
To use an automotive expression, the Mediterranean market was running on fumes last week. There have been numerous prompt positions and very little new business forthcoming. Even routine biodiesel business has been slow. The highlights have been caustic being fixed in various directions out of France and Egypt; benzene being attempted from Skikda, Algeria; urea ammonia nitrate cargoes from Annaba, Algeria, Damietta, Egypt, and Novorossisk, Russia; phenol and acetone from Huelva, Spain; clean petroleum to Morocco; base oils to Israel and North Africa; a couple of MTBE cargoes to Italy; methanol from Kulevi, Georgia, to Bulgaria, Turkey and Romania; and a couple of shipments of phosphoric and sulphuric acid. Vegetable oil has been noted but the huge number of ships chasing each cargo has caused a collapse in vegetable oil freights.
It has been a frustrating week along the transatlantic route again, with several requirements failing to develop, including some of the paraxylene and pyrolysis gasoline possibilities from Antwerp-Rotterdam-Amsterdam. More caustic is being attempted from Antwerp-Rotterdam-Amsterdam to U.S. Atlantic Coast. Two thousand tons of base oils were studied from Antwerp to Houston for prompt, seemingly a regular monthly requirement, and there has been some pyrolysis gasoline quoted out of the Mediterranean. Sulphuric acid has been noted from Hamburg, Germany, and urea ammonia nitrate was quoted into Canada.
Styrene has been active along the Far East route, with cargoes quoted out of Rotterdam, Moerdijk, Netherlands, Gonfreville, France, and Tarragona, Spain. Five thousand tons of paraxylene appears to have fixed, as does 5,000 tons of acetone. Two thousand five hundred tons of base oils from Antwerp to China were covered and a small parcel of monopropylene glycol was taken. A parcel of butanediol has yet to fix to Dong Nai, Vietnam. A couple of outsiders have some space left, and there is prompt space remaining on scheduled carriers.
There seems to be plenty of tonnage around, either on berth already, or poised to go on berth along the India and Middle East Gulf route. A couple of phosphoric acid shipments were booked to Sikka and Kakinada, India. Between 6,000 tons and 7,000 tons of pyrolysis gasoline was seen from Aliaga, Turkey, to Sohar, Oman, while others were looking at benzene from Skikda, Algeria, to Shuaiba, Kuwait. Small parcels of polyol and dowanol were noted to El Dekheila, Egypt, Aqaba, Jordan, and Jebel Ali, U.A.E., and there were some glycol ethers to Kandla, India. Four thousand tons of base oils fixed into India from Le Havre, France, and 7,000 tons to 8,000 tons of base oils are still quoted into India or the U.A.E. from both the Baltic and West Mediterranean, with a further parcel of base oil quoted to Chennai, India. Five thousand tons of styrene fixed from Tarragona, Spain, to the west coast of India in the mid $60s/t.
With China closed all week, and with the New Year celebrations taking place in all the countries along the domestic Asia route it was inevitable that new business would be lacking. Early signs are that there will be a number of vessels open around mid-month that could cause some serious competition for firm cargoes, but thereafter it will depend greatly on how quickly Chinese demand resurfaces. Two thousand five hundred tons of base oils from Korea to Merak, Indonesia, were heard to have been worked in the mid $50s/t. Even palm oil demand is sluggish into China and India and fresh cargoes will only start appearing from now onwards.
It has been a case of treading water in transpacific trade, waiting for everyone to resume work, and then to determine what arbs, if any remain. Prior to the holidays, 24,000 tons of benzene had been looking at going from Korea to the U.S. Gulf. Sulphuric acid to Chile is mostly on hold due to difficulties in reconciling product pricing when freights are in the $70s/t. Several ships have February space to Europe. Sixteen thousand tons of caustic fixed from Yosu, Korea, to Genoa and Ravenna, Italy, but the main products in demand are biodiesel grades and feedstocks from China and Southeast Asia. Three thousand five hundred tons of palm acid oil was booked from Port Klang, Malaysia, to Antwerp-Rotterdam-Amsterdam in the mid $80s/t. Three thousand tons of orthoxylene was seen from Ulsan, Korea, to the Mediterranean, and 6,000 tons to 9,000 tons of cyclohexane is still unfixed from Map Ta Phut, Thailand, to Spain and Antwerp-Rotterdam-Amsterdam.
There has been a considerable amount of cargo enquiry in the regional markets along the India and Middle East Gulf route, and with space tight due to port congestion rates remain rather firm. Cargoes of ethylene dichloride, glycol, paraxylene, acid, pyrolysis gasoline, methanol, styrene, ethanol, MTBE, clean petroleum and canola have been seen. Base oils have been moving well from Yanbu, Jeddah, Saudi Arabia, Al Ruwais, U.A.E. and Sitra, Bahrain, with fixtures noted from all these refineries. Unsurprisingly, eastbound demand has been calm, although a few cargoes of base oil, MTBE, methanol and aromatics were quoted. Westbound space remains tight. Between 5,000 tons and 10,000 tons of methanol was quoted from Mesaieed, Qatar, to U.K. Continent and the Mediterranean. More methanol was circulated from Al Jubail, Saudi Arabia, to Rotterdam, and 15,000 tons of caustic was pushed from Mesaieed to the Mediterranean. Various glycol possibilities were seen, and up to 10,000 tons of ethanol was spotted from Karachi, Pakistan, to the East Mediterranean. Six thousand tons of benzene went from Sohar to the Mediterranean, along with 11,000 tons of base oil from Sitra, Bahrain, to Antwerp. Another shipment of 11,000 tons base oils is being quoted from Sitra to Antwerp for the second half of February.
This report was originally featured in the Feb. 13 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.