Freight rates curiously took a dive earlier in the week, but are now beginning to show some signs of recovery. Owners were willing to fix 5,000 ton lots from Houston to Antwerp-Rotterdam-Amsterdam in the low $40s/t, although some of the more recent deals show levels nearer the mid $40s/t. Rates from the U.S. Gulf to the east coast of South America look to have stabilised, as do levels from the Gulf to the east coast of Mexico, whereas there is a plentiful supply of tonnage queuing up for cargoes into the Caribbean, ensuring competitive levels.

The U.S. Gulf-to-Far East is seeing poor demand for products normally associated with this route, such as styrene and benzene/toluene/xylene, and instead there have been commodities like MTBE, ethanol and acetone heading out. Rates are very thin, and with so many ships available numbers are somewhat notional. Incredibly low as it may sound, we believe that a firm enquiry for a 10,000 ton cargo from Houston to a principal Far East port could yield a rate between $35 and $38/t. But the cargo would have to be fully firm to ensure the most competitive rate.

Europe
The short-sea market is sharply divided into the Mediterranean and the North Sea. Owners plying the North Sea and Baltic regions report good employment possibilities and reasonably firm freight rates. The Mediterranean on the other hand is proving to be short on cargoes but long on ships. A 5,000 ton cargo from Italy to the French Mediterranean easily produced 10 offers, most of which were at identical levels.

Transatlantic westbound is quiet, but at least there are a few more potential cargoes this week. Products associated with gasoline blending, such as pyrolysis gasoline, reformate and alkylate have been more common, though most are of 10,000 tons and above to benefit from economies of scale. A 5,000 ton cargo from Rotterdam to Houston would work out at around $30/t.

There are few cargoes that work for traders from Europe to the Far East right now, which means that space continues to build on this service. Freights are consequently slipping, and a 5,000 ton cargo from Rotterdam to principal Far East ports could find freight at $70/t or less.

Asia
Styrene and aromatic cargoes have slowly begun to appear on domestic Asian routes, with most looking to go into China. Space tends to be fairly tight in the region, and owners are picking up increases of a dollar here and a dollar there. Export benzene has resurfaced too, and with steady demand for sulfuric acid and edible oils we see freights holding stable for cargoes back to Europe and the United States.

The Middle East-to-India market continues to be active. Westbound especially is busy with large lots of MTBE, methanol, glycols, pyrolysis gasoline and caustic being shipped, keeping freights steady. Eastbound however sees more interest from owners who are unwilling to end up in Europe, with the result that numbers on cargoes into the Far East have slipped slightly. A 5,000 ton cargo from the Middle East Gulf to Southeast Asia now works out in the high $30s/t, with the same cargo to principal Far East ports paying in the low $50s/t.

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.