The situation appears to be mixed across the globe. Some routes have done well this week. and freight levels have recovered, but others have been quiet, which has put pressure on those rates.
For a while, it seemed as though there would be more than enough cargoes to fill out the last April stragglers on the U.S. Gulf-to-Far East route, but many of those requirements simply fizzled out. Owners have become more desperate, and charterers have seized the opportunity to achieve even lower freight levels. For example, 10,000 tons of ethylene dichloride was fixed from the U.S. Gulf to China at just $49 per metric ton, a staggering reduction of $20/t in the space of a few months. Styrene is starting to appear on the route, and a couple of traders have been asking about ethylbenzene shipments to China. Phenol is another possibility that a couple of traders are studying. Ethanol is no longer moving to China, but there are some inquiries to send it to Vietnam and Korea instead.
Probably one of the more interesting routes, eastbound Transatlantic is generating many more cargo inquiries, with the result that space is tighter and freights have edged up a little. Numerous styrene inquiries have been mentioned into Antwerp-Rotterdam-Amsterdam and the Mediterranean. Ethylbenzene has also been discussed, and several parcels of cyclohexane have been mentioned for prompt loading. A couple of biodiesel shipments are pending from the U.S. Atlantic Coast to the east coast of the United Kingdom and/or Antwerp-Rotterdam-Amsterdam. Shipments of metaxylene, caustic potash, phenol, cumene and acrylonitrile have been booked into the Mediterranean. A shipment of 15,000 tons of base oil was seemingly fixed from the U.S. Gulf to Lagos, Nigeria, for loading in the first half of April, the rate for which is rumoured to have been $900,000 to $950,000.
Cargo volumes are up slightly this week on routes to the Caribbean, and freight rates have responded, with charterers paying some $2-$3/t more to entice owners. Caustic is the main driver, but there have been some more base oils. A new tender for 2,100 tons of four grades of base oils has been issued for delivery into Cartagena for delivery SM May. On top of that, there is a spot market enquiry for 2,500 tons of base oils to Rio Haina and/or Cartagena.
The trade lane from U.S. Gulf to the east coast of South America has flopped heavily this week, with hardly any interest being shown for ethanol or caustic. Instead, there have been 10,000 tons of urea ammonia nitrate quoted to Brazil and 15,000 tons of paraxylene to Suape, which was covered, the rates for which have been low $40s/t. Base oils amounting to 6,000 tons are making their way down to La Plata from the U.S. Gulf, and a new requirement was seen for 900 tons of base oils from Houston to Campana for June.
The route to India and the Middle East Gulf is another route that has suddenly clammed up. Phenol and ethanol may still be a possibility, but beyond that there is not much else this week.
After a few sluggish days, there has been a bit more activity around the North Sea and Baltic region, which has certainly cleared away much of the idle tonnage that had been left kicking its heels after Easter. A few more biodiesel quotations have started to pop up, and there has been a bit more pyrolysis gasoline, benzene, cyclohexane, styrene and orthoxylene. Base oils, however, have tailed off, with hardly any material moving out of the Baltic. Ethanol is much less common, and caustic has been dull, possibly because of plant turnarounds.
Activity into the Mediterranean has been reasonably strong over the past few days. Base oils are moving to Egypt and Turkey, and there has been some acrylonitrile from the Baltic into Turkey that had been trying to combine with some methanol into the East Mediterranean and Black Sea. Four thousand tons of styrene was mentioned from Antwerp-Rotterdam-Amsterdam to Turkey, and 3,000 tons of aromatics were spotted from Rotterdam to Adriatic. A shipment of 2,500 tons of wax was fixed into Genoa, and there were several inquiries of biodiesel into Genoa, Savona, Vado, Huelva and Lavera. A shipment of 5,000 tons of benzene was quoted from Terneuzen to Huelva. A small parcel of ethanol was fixed into Barcelona, and a fresh requirement for 3,500 to 4,000 tons of ethanol was quoted into Tarragona.
It has not been particularly busy in northbound markets, but there have been a number of fixtures all the same. Base oils are moving up from Italy, Spain and Portugal, and there has been some cumene, toluene, phosphoric acid, ethanol and several cargoes of pyrolysis gasoline fixed this week. Traders are also quoting 7,000 tons of benzene, toulene and xylene from Aliaga, Turkey, to Antwerp-Rotterdam-Amsterdam, which has not been seen for quite a long time.
It has been a slow week overall for cross-Mediterranean trade, and the list of prompt ships continues to grow. Even base oils have not been that active this week. Of particular note has been the number of large biodiesel fixtures cross-Mediterranean. These cargoes are being moved in anything up to 25,000-ton lots, with one of the more recent ones from Spain to Italy paying just $15/t. Usually, these cargoes would ship in 3,000-5,000 ton sizes at rates ranging from low $20s/t up to low $30s/t, and would be considered a staple for the coastal fleet, but now a single shipment on a large tanker does away with 4 or 5 coasters.
It has been pretty busy on the westbound Transatlantic service, and freights are starting to creep upwards. A couple of paraxylene requirements have been seen from Rotterdam and Antwerp, with 5,000 tons of paraxylene fixed across from Haifa. A shipment of 5,000 to 15,000 tons of caustic was quoted from Stade, Germany, to the U.S. Atlantic Coast, and a further 10,000 tons of caustic was worked from Rotterdam to Mexico. A large shipment of sulphuric acid was booked from Hamburg to the U.S. Gulf, and there were several further acid quotations to Savannah, Mexico and the U.S. Gulf. A shipment of 2,000 tons of acetone was fixed from Huelva to Houston, and others were attempting to send acetone across too. On other routes, 1,500 tons of base oils were quoted from Rotterdam to Houston, and a further 2,000 tons of base oils were seen from Riga, Latvia, to Houston. A shipment of 4,000 tons toluene was fixed, with suggestions of another toluene cargo from Leixoes. A shipment of 8,000 tons of biodiesel was fixed from Rotterdam to the U.S. Atlantic Coast, and 4,000 tons of solvents were worked from Rotterdam to Savannah. From Rotterdam to Puerto Cabello, 2,000 tons of orthoxylene were noted, and more orthoxylene and solvents were quoted to Mexico. Several shipments of urea ammonia nitrate were fixed to the Great Lakes, and more urea ammonia nitrate was done from Heroya, Norway, and Sluiskil, the Netherlands.
There has not been a lot of trade to the Far East going on, nor has there been a great deal of April space around anyway. One of the highlights was a fixture of up to 9,000 tons of base oils from Antwerp to Southeast Asia and Korea. Rates are all fairly settled on this leg.
The next base oil on routes to India and the Middle East Gulf stems from Gdansk, Poland, and is being quoted into India, but otherwise demand consists mostly of acid, vegetable oil and some small parcels of solvents. Rates are stable.
Looking at the big picture, demand within Asia is subdued, but this seems to occur every year around this time. Aromatics, which is the backbone of most of these domestic routes have been largely quiet. Recently, there has been a bit more paraxylene, toluene and pyrolysis gasoline shown on the northbound route into China, but the hard core routes from Korea and Taiwan into China have been thin for these particular commodities. Base oils have been one of the busier products, with movement occurring within Northeast Asia, as well as shipments south to Vietnam, Singapore, Rayong and Manila. Base oils have also been moving north, with shipments seen from Sri Racha and Rayong.
April space is still tight on the Transpacific route, but demand has cooled off a bit too. Traders are looking at the possibility to move benzene Korea to the U.S. Gulf in May, the rates for which are high $40s to low $50s/t. Small parcels of acetone, aniline and 2-ethylhexanol have also been seen. The market to Europe continues to produce a steady level of demand, while space opportunities are limited on the scheduled carriers. A shipment of 15,000 tons of base oils is being attempted from Singapore to Rotterdam, and there has been a need for a large lot of caustic from China. Acetic acid is also understood to be moving, along with parcels of biodiesel, vinyl acetate monomer, octene, cyclohexane, ethyl acetate and DINP.
A great deal of material is seeking space in the regional markets throughout India and the Middle East Gulf, with some cargoes taking much longer to fix than normal. Base oils are moving out of Yanbu, Saudi Arabia, in a big way, and there have been some Iranian base oils around. Rates are all rather strong. Eastbound too is pretty busy, possibly as a result of the potential trade war between China and the U.S. Base oils are being attempted from Al Ruwais, U.A.E. to China. Westbound has also been active. Several benzene cargoes have been booked to the U.S., with potentially more pending. A number of small chemicals parcels are around too, most being destined for outports, which therefore should take care of the smaller vessels on berth.
This report wasoriginally posted in the April 18 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.