U.S. Gulf of Mexico
The pool of ships that is available for cargoes in any direction out of the U.S. Gulf for October loading looks to have diminished over the past week or so. Additional tonnage has had to be drafted onto the U.S. Gulf to east coast South America route to cover some styrene and caustic demand, whilst regular carriers all report being full for the rest of the month.

Space is similarly scarce on the U.S. Gulf to east coast Mexico and Caribbean service. The regular owners are nearly all full, and those ships that do have space are only interested in cargoes for specific destinations and are not so keen to add additional ports to their itinerary. Several ships have also found cargoes out of the U.S. to Chile and west coast Central America.

Transatlantic eastbound is busy with benzene/toluene/xylene demand, and again outsiders are reported to have been brought on berth to cover demand. U.S. Gulf-to-Asia is also booming with many benzene/toluene/xylene requirements, some of which are as big as 20,000 metric tons.

Normally, there would be sufficient outsiders around to take up the slack, but that does not seem to be the case for October. Freight levels have yet to react, but it could be that there are some increases in the pipeline for October loading.

Europe
Trade throughout Europe ground to a standstill during the course of the main petrochemical conference that took place in Budapest last week. Cargo volumes remain subdued right now, but the chemical industry in general posted a strong performance through 2010 that is expected to be repeated in 2011.

The chemical tanker market of course will continue to remain depressed so long as there is excess tonnage, which looks to be the case for the next year or two. Meanwhile, there are no great changes to report to any of the European coastal routes.

Tonnage is long, and space can readily be found for most destinations within Europe. Transatlantic westbound produced a poor crop of cargoes, with the main focus being on smaller cargoes of naphtha and gasoline – typically 15,000-ton sizes, one or two of which were covered.

The other chief commodity seems to be urea ammonia nitrate from the Baltic and Black Sea, although we did see another cargo of hydrocracker bottoms looking to move from Flushing to the U.S. Gulf.

Europe-to-the Far East is beginning to generate some interest in butanols and paraffins to China as well as smaller parcels of acrylonitrile, mono ethylene glycol and ethanol. Rates on all these trade lanes are largely static for now, with a trend only expected to emerge over the next week or ten days.

Asia
Trade has yet to fully resume after the local holidays in Asia. There were the usual benzene/toluene/xylene and styrene movements into China, but the level of enquiry seems disappointing. The amount of fixing being done on the deep-sea routes out of Asia has not been that great either.

Benzene exports have given way to caustic, and it is true that some of these shipments from China are as big as 30,000 tons in one go, but in spite of this, we can still see some ships showing open in Asia in October.

There are mixed signals about the palm oil market too. We have heard of levels well into the $70s/t for 12,000 tons from the Malacca Straits to the Black Sea for instance, but at the same time the growing list of open tonnage would suggest that the traders are having some success in holding back in their attempts to force freights lower.

Palm oil demand is expected to dwindle from India too as it gets closer to the Diwali festival, by which time stocks should be full. It is a bit early to tell how this will all pan out, but it is conceivable that the Asian market may have peaked.

The Middle East Gulf-India region is tight westbound, and the raft of unfixed cargoes such as benzene, linear alkyl benzene, methanol, glycols and canola oil are testimony to this. Eastbound however does see a number of October ships able to provide space.

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.