The markets in the United States and Europe have not shaken off the lethargy of the Easter holidays, while markets in Asia have been reporting lower levels of demand for several weeks already.
The U.S. Gulf-to-Far East route has been under pressure in recent weeks due to physical product shortages of commodities such as styrene and ethylene dichloride. The latest obstacle has been the proposed tariff hike on shipments to China. So far, traders continue to nose around for possible styrene movements, but it is still a little early as a couple of large production units in the U.S. Gulf have yet to fully resume production.
This week has actually produced more business, with movements of methanol, phenol, tallow and ethylbenzene noted. Paraxylene in the amount of 10,000 tons from Texas to China was heard fixed for $55 per metric ton, demonstrating the reduction in freight levels over the past month. As usual, base oils do not feature.
There has been a reasonable amount of business conducted into Europe, but the eastbound transatlantic route still lacks styrene, although it may appear should U.S. sellers and Chinese buyers fail to agree on prices. At the moment, there is some ethylbenzene heading to Europe. There have also been parcels of glycol, cyclohexane, turpentine, biodiesel, tallow, cumene, ethanol, vinyl acetate monomer and caustic. Rates are pegged in the mid $40s/t for 5,000-ton parcels from Houston to Rotterdam.
Trade to the Caribbean has been hit rather hard by the recent Easter holidays, the American Fuel & Petrochemical Manufacturers event in San Antonio and the latest sanctions policy of the Trump administration, which has targeted certain Russian individuals and thereby had major implications for some regular exports into the Caribbean. One bit of business that does seem to be progressing is the shipment of 5,200 tons of base oils to Cartagena, Colombia - the tender for which was awarded and will be supplied from the U.S. Gulf.
One of the brighter routes out of the U.S. currently is to the east coast of South America. Space looks to be in fairly short supply right now. Ethylene dichloride totalling 13,000 tons from the U.S. Gulf to Maceio, Brazil, ended up on an outsider, allegedly in the mid $60s/t. A haul of 20,000 cubic meters of ethanol fixed from the U.S. Gulf to northern Brazil in the low $40s/t, with a second similar shipment booked for later dates at $44/t.
Base oils amounting to 3,600 tons were worked from Houston to Rio de Janeiro at $62/t, but the shipment dates changed and that fixture failed to complete. A 4,400-ton shipment of urea ammonia nitrate concluded from Mississippi to Chile for a level reported to be in the low $90s/t. Further cargoes of styrene and paraxylene have been seen looking to go to Brazil.
There is a little more life to the route to India and the Middle East Gulf. An ethanol shipment was confirmed fixed to the Middle East Gulf, and a further 9,500 tons of ethanol has been quoted from Texas to Kandla, India. Four or five thousand tons of phenol concluded from Mobile, Alabama, to Kandla in the mid $80s/t.
Since Easter, the amount of new business quoted in the North Sea and Baltic markets has been rather thin, leading to a growth in the number of prompt open positions. Rates have sagged a little too. A cutback in biodiesel production is perhaps one reason, with European producers unable to compete with the substantial volumes of material being imported from Argentina and Indonesia. These cargoes are being redistributed after arrival, but the shipment sizes have increased so that it is common to see 15,000- to 20,000-ton shipments instead of the usual 3,000- to 5,000-ton parcels. Base oil movements still occur, but were more plentiful prior to Easter.
Southbound demand seems reasonable into the Mediterranean and cargoes of styrene, pyrolysis gasoline, biodiesel and vegetable oil have been done this week. A number of spot base oil cargoes have been booked into North Africa too.
There is not so much going on in northbound markets this week. Pyrolysis gasoline is still moving, with a couple of cargoes quoted from the West Mediterranean, but overall volumes are down. Pyrolysis gasoline in the amount of 2,600 tons was booked from the west coast of Italy to Rotterdam, interestingly at $195,000, which is a higher level than the previous shipment. Base oils are moving from Spain and Italy, but are more in-house requirements than spot trading.
The pace of cross-Mediterranean trade has picked up a little following a rather dull period over Easter, causing fewer prompt open positions to be seen. Rates are much the same as before, however. For example, 5,000 tons of pyrolysis gasoline from Priolo, Italy, to Barcelona secured $23/t, which is the same as the previous shipment. Base oils have been fairly active within the Mediterranean, with sales concluded into all the North African countries, as well as to Israel, Greece and Turkey.
Transatlantic traders continue to explore the possibility of sending pyrolysis gasoline across to the U.S. There is also a 10,000-ton cargo that may actually be benzene, while several parcels of paraxylene have been shown around to Mexico and the U.S. Atlantic Coast from Antwerp-Rotterdam-Amsterdam and the East Mediterranean.
One of the paraxylene requirements is prompt, and believed to be linked to a downstream plant problem, in which case further paraxylene movements can be expected. Another 5,000 tons of paraxylene was booked to Mexico at $53/t, but failed to lift subjects. Timing seems to be critical on these particular shipments. Twenty thousand tons of ammonium polyphosphate are fixed from Sillamae, Estonia, to the U.S. Gulf. Several sulphuric acid cargoes are looking from Hamburg and the Baltic to the U.S. Gulf and Mexico. Caustic amounting to 5,000 tons was attempted from Rotterdam to the east coast of Canada with a 10,000-ton parcel quoted to Mexico. It seems there are several ships with urea ammonia nitrate and Adblue making their way over to Canada and further urea ammonia nitrate and Adblue possibilities quoted to the U.S. Atlantic Coast and U.S. Gulf from Sluiskil, the Netherlands.
Trade to the Far East is well-balanced for the remainder of April. The U.S.-China trade war might bring about some new possibilities on this route should sellers look at swapping material, although it is still early days for this to occur. Between 5,000 and 6,000 tons of base oils fixed from Gdansk, Poland, to Singapore, and the same volume of tallow fixed from Rotterdam to Singapore. Parcels of butanol, acetone, methyl ethyl ketone, base oil, hydrocracker bottoms and rubber process oils have been noted.
A couple of base oil possibilities have popped up this week to India and the Middle East Gulf. Some 6,000 tons of base oils were also booked to the region from the Black Sea. The trade in small parcels of solvents is doing fairly well, with at least one ship more or less full in such a fashion. Other owners have opted for big bulk shipments, such as phosphoric acid from Morocco and Tunisia, as well as vegetable oil from the Black Sea.
Until very recently, falling energy and feedstock costs had meant that buyers were pretty relaxed and were in no hurry to conduct new business. The latest tension in the Middle East, however, has caused prices to firm, which might convince some buyers to take material now. One of the slowest routes has been the intra-Far East service, where aromatics in particular have been much quieter than normal.
Base oils also do not seem to have been that vigorous in the area. Southbound trade is strangely the opposite, with better prospects this week, including caustic, acetic acid, sulphuric acid, butanols, ethylene dichloride, C5, alpha-olefins and a few base oil possibilities. Aromatics are not as plentiful northbound either, but there have been other grades instead. A haul of 3,000 tons of base oils were worked Cilacap, Indonesia, to Nantong, China, at $75/t, but the deal failed to finalize.
April space is tight on the Transpacific route. Owners appear to have been filling up with benzene, with other aromatics such as pyrolysis gasoline, toluene and mixed xylenes discussed. Small parcels traffic has also accounted for some of the space. Alkylate totalling 20,000 tons fixed from Korea to the U.S. west coast.
Demand has been strong to Europe, with more ships than usual going on berth and filling out. Where completion space has remained, some competitive levels have been achieved, especially from Southeast Asia. Biodiesel has been one of the busier products, as well as acids and the usual acrylates and vinyl acetate monomer.
There is plenty of demand in the regional markets throughout India and the Middle East Gulf, with a shortage of space being noted, which is keeping some cargoes on the market for several weeks without finding cover.
Eastbound has been boosted by strong demand for aromatics from multiple ports in India, the Middle East Gulf and the Red Sea. Contractual demand is also strong, keeping scheduled owners away from the spot market. Spot requirements include methanol, MTBE, base oils, paraffins, ethylene dichloride, styrene, linear alkyl benzene, glycol, acrylates and ethanol.
Westbound is fairly active with limited space available. Traders are looking at sending aromatics to Europe and the U.S. Gulf. In addition, there have been fixtures of caustic and ethanol this week. A shipment of 20,000 tons of easy chemicals from the Middle East Gulf to Rotterdam produced indications of mid $50s/t.
This report wasoriginally posted in the April 11 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.