There is very little happening out of the Americas just now, and space is freely available. European coastal markets are satisfactory, but exports are flat. Asian trade lanes are stable, though not as tight as before.
U.S. Gulf of Mexico
Rates have not changed by any great amount on any of the routes out of the Americas, but spot activity is thin, and it is not difficult to secure space for most requirements. Contractual volumes underpin the U.S. Gulf-to-Caribbean route, although at least one scheduled owner has plenty of space. Furthermore, there are a number of ships fully open in the U.S. Gulf in May that could consider going on berth for a parcel of 5,000 tons or more.
It is the same from the U.S. Gulf to the east coast of South America. We have seen some relet opportunities that have brought on berth additional ships that are now seeking completion cargoes. A couple of base oil cargoes were booked out of the U.S. Gulf into Brazil, but a bunch of fixtures from Europe probably implies Brazilian base oil demand is covered for a while.
Transatlantic eastbound could see further interest in shipping styrene, and a little more ethanol was booked, but overall the route is flat, and rates for 5,000 tons work out in the low $40s/t basis Houston to Rotterdam.
U.S. Gulf-to-Far East is dull. Acetone has been the main commodity this week. Some traders have been trying to fix in the mid $40s/t for 5,000 tons of aromatics from Houston to principal scheduled Far East ports, but owners are firmly opposed to such levels, and nothing has concluded that we are aware of.
Europe
More contractual business is emerging from some of the Northwest Europe producers who have been moving minimal amounts of material over the past month or so because of plant issues or turnarounds. This extra volume has helped to absorb some of the slack that has found its way into the tonnage situation in Northwest Europe.
The Mediterranean too is experiencing some tightness on certain vessel sizes, and freights have remained steady, or in some cases have firmed slightly. Unlike deep-sea, owners are more prepared to walk away from business if it does not come close to covering costs. Over the past month, bunker costs have risen by around $30/t, although prices are starting to dip again.
Demand for Transatlantic westbound remains poor, though rates are unchanged. Rates from Europe to Asia did stabilize, but a raft of tonnage is on berth end May or early June, threatening to cause levels to weaken further unless more cargo is shipped.
Routes to India and the Middle East Gulf are stable, with fair volumes of acid, vegetable oils, pyrolysis gasoline and even base oils on the move.
Asia
Plenty of aromatics are being quoted within Asia, either northbound into China and Taiwan, or southbound from Korea into Singapore and Southeast Asia. There are ships that have open space on both routes, but it requires a certain patience to be able to tie in with them and pocket the remaining space at levels that suit both sides.
Benzene demand from Europe has virtually dried up, and it is more or less the same with benzene to the U.S. Gulf. Instead, palm oils have become more prevalent, both to India and China as well as to the Mediterranean and Northwest Europe. Sulphuric acid is still being seen to Chile, Brazil and the U.S. Gulf, with occasional bursts of biodiesel to Europe.
Freights are steady on the whole, but a growth in the amount of open space may chip away at those rates over the next couple of weeks.
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.