Poor demand has been reported in many of the routes out of the U.S. Gulf and Europe, causing freights to soften. Asian markets are hanging on to unchanged freight levels, but the amount of open space is growing.
U.S. Gulf of Mexico
U.S. markets have been undermined by a surplus of tonnage, and rates on some routes have weakened even further. Numbers into Brazil and Argentina for example have dropped down into the low-to-mid $40s/ton for 5,000 ton parcels, and with space still being seen on this trade lane, it may be possible to obtain even slightly lower levels against a firm cargo.
Transatlantic eastbound is the other major route on which lower levels can be seen. A few aromatics parcels were booked, but this still leaves open space which can be snapped up in the high $40s/t for 3,000 to 4,000 ton cargoes from Houston to Rotterdam.
U.S. Gulf-to-Asia is massively overtonnaged for prompt loading. We believe a firm 5,000 ton cargo from Houston to principal Far East ports could just slip into the low-to-mid $40s/t.
U.S. Gulf-to-India rates, whilst generally holding steady for much of the time may also become infected by the surplus of tonnage, and it is conceivable that rates could give way slightly.
Europe
Somewhat more trade has reportedly been taking place in Northwest Europe and the Baltic over the past week, but freight levels show no change all the same. Inter-Mediterranean business is looking a little brighter as well, but there are plenty of ships open in the region over the next seven to ten days which means that freights will remain competitive.
Westbound transatlantic is rather dull with few larger cargoes reportedly looking to ship. It may therefore be possible to piggyback with a scheduled sailing and take some base oils across. Levels for 1,000 tons of base oils from Antwerp-Rotterdam-Amsterdam to the U.S. Atlantic coast will now be in the upper $60s/t, but the rate for 5,000 tons will be closer to the mid $30s/t.
Freights to Asia have been knocked back down as owners vie with one another to fill the last remaining space on their prompt vessels. Figures seen prove that mid $70s/t can be achieved for 5,000 ton cargoes from Antwerp-Rotterdam-Amsterdam to main ports in the Far East.
Asia
Reports from Asia indicate that local intra-Asian business is doing fairly well, with numerous requirements for 5,000 ton lots of aromatics seen, and not just into China, Taiwan and Korea, but also south into Southeast Asia as well. Freight figures show not much change over previous weeks.
Aromatic exports from Asia to Europe and the United States have picked up, and further cargoes of sulphuric acid are being shipped from Asia to Chile and the United States. Rates are therefore marginally firmer coming out from Asia, but it would be incorrect to suggest that space is tight. It is not, and there are open positions in Asia for most destinations.
The Middle East Gulf-India region is also seeing rather more in the way of open tonnage, with ships open in spot/prompt positions, suggesting that both spot and contractual demand has flattened. We have heard of some plant issues in Iran that may be affecting exports from the region.
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.