In the Caribbean, freight rates are roughly unchanged. For example it is possible to fix 5,000 tons of base oils from Houston to the east coast of Mexico in the low $20s/t, but there is greater choice of tonnage.

Service into Brazil and Argentina has very little open space on the scheduled carriers because they are mostly full of contractual business. But for a large-enough cargo of some 10,000 tons, it would be possible to find a ship in the U.S. Gulf that is at a loose end, at a level in the low $40s/t. Opportunities exist, too, to ship base oils to Lagos from the U.S. Gulf, something that did not exist some five or six weeks ago.

Eastbound transatlantic has faded fairly quickly as traders see no value in shipping ethanol or benzene/toluene/xylene to Europe. A 5,000 ton cargo of base oils from Houston to Rotterdam would cost in the mid-to-high $40s/t nowadays.

Numbers on the U.S. Gulf-to-Far East route have collapsed with plenty of prompt open space. A 5,000 ton cargo to Korea or Taiwan, for instance, would fetch just short of $50/t. Rates into India are holding, however, and the same cargo to Mumbai would cost around $90/t.

Europe
Coastal markets within Europe are nearly all looking more feeble as demand has melted away. The only trades to show any firmness are those from Northwest Europe into the Mediterranean and possibly the market out of the Black Sea – the latter more because of a stronger vegetable oil market than any real change in chemical demand. There are, however, more enquiries to ship base oils into Turkey than there were last month.

Transatlantic westbound is dull, and freights are sliding. A 5,000 ton cargo of base oils from Antwerp-Rotterdam-Amsterdam to the U.S. Atlantic coast could possibly achieve a level in the high $30s/t to around $40/t.

Activity into Asia has been disappointing too, and there are a number of vessels looking to fill up. We would assess this route as being in the mid $70s/t for a 5,000 ton cargo from Rotterdam to main ports in the Far East. Levels into India remain unchanged, also in the mid $70s/t for 5,000 tons of base oils.

Asia
Asian coastal markets are suffering from an oversupply of tonnage. Some are local ships that have found less employment in the domestic market, and some are deep-sea vessels that become stranded due to the decline especially of palm oil demand in India, Pakistan and China.

There have been suggestions that benzene could ship to Europe or the United States, but so far owners are finding it hard to find firm enquiries.

Freights for 10,000 tons of palm oil from the Malacca Straits to the west coast of India have been hovering in the low $20s/t for some weeks, but even this rate is becoming hard to obtain. The reason, as with China, is that stocks are high and there is little ullage in shore tanks for more material.

In contrast, the market in the Middle East Gulf-India region continues to buzz with plenty of cargo requirements.

Numbers westbound to Europe tend to be unchanged, with small parcels paying not far off $100/t. Cargo sizes need to be large to minimise the freight bill, with a 10,000 ton cargo bringing levels down into the $60s and $70s/t, depending upon where the cargo will discharge. Numbers into India have eased very slightly, perhaps costing around $40/t for 3,000 tons of base oils from Iran to Mumbai on a modern ship. There are some older units in this region that will consider lower levels.

Adrian Brown is senior market analyst for chemicals and base oils with SSY Shipbrokers, London. Information about SSY can be found at www.ssyonline.com. Adrian Brown, in the U.K., can be reached directly at research@ssy.co.uk or by phone at +44 1207-507507. In the U.S., SSYs Steve Rosenthal can be reached at fix@ssychems.com or +1 203-961-1566.