The market in the U.S. Gulf scraped through another week without any major changes. European coastal routes have been steady, but deep-sea is not generating much traffic. Asia continues to be active and space remains tight.
U.S. Gulf of Mexico
The freight market out of the U.S. Gulf is fairly resilient, and freights have not changed much. Equally, business is not booming, and ship owners have to learn to take cargoes where they can.
Bunker prices are again on the rise, pushing up the limit to what owners can easily accept. For example 380 cSt fuel oil in Houston now costs $445 per ton, up from $415/t from the beginning of June. A tanker of around 20,000 dwt consumes typically 20 tons of 380 cSt/day, thus adding $600/day just to feed the main engine. Themarine gas oilrequired to run the auxiliaries, pumps, etc., comes on top.
This week sees pretty much the same ships open in the U.S. Gulf as last week. The major difference is that many of the scheduled ships have filled, whether to Europe, South America or Far East, leaving behind a bunch of bigger ships unable to locate sufficient larger cargoes with which to go on berth.
Europe
Smaller ships running on the European coastal trades have found reasonable levels of employment this week. Of all the main trading areas, the North Sea and Baltic have been most rewarding for owners, and some freight rates have actually increased.
This does not apply across all routes however. Southbound into the Med has been solid for a long time, but this week saw a few extra positions and the feeling that freights had come off, especially into the Western Mediterranean. From Rotterdam to Southern Spain, 3,000 ton parcels have been attracting levels in the low 20s/t. The Eastern Mediterranean has been slightly more dismal too as the small clean petroleum market seems to have eased off. Some of the rates being paid for vegetable oil cargoes from the Black Sea into the Western Mediterranean are not quite as firm as they once were.
Elsewhere, westbound transatlantic freights have subsided slightly, at least from the main ports. Business to unscheduled ports, which includes many of the base oil shipments, retains some firmness. It is common to see 3,000 tons of base oils from one of the restricted Mediterranean ports pay $85 to $100/t into Houston. Europe-to-Asia is still very quiet, and there is also space into India.
Asia
The flow of benzene from Asia to Europe has become less frequent, but with fewer open ships in Asia this is not such a hardship for owners. There are plenty of palm oil cargoes to Europe, although the rate ideas of mid $50s/t from charterers cannot compete with the $70s/t that is being fixed for benzene. There is an expectation too that more biodiesel will be seen westbound from Asia, as well as the possibility of more base oil cargoes.
Sulphuric acid to South America has depleted the stainless steel fleet in Asia, but traders suggest that the trade should start to slow down as demand is fully covered. After several weeks of slow regional trades within Asia there have been some promising signs of more aromatics surfacing into China which will help those ship owners going northbound. Southbound business has not materialised to the same extent however.
India and the MEG continue to be active regions in which to trade ships. Rates for 5,000 tons of base oils from Iran to the Eastern Mediterranean can possibly be done for around $60 to $65/t at the moment.
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.