Space is tight from the Gulf to the west coast of Central America, and we have seen caustic and MTBE moving in this direction.

Trade to the east coast of South America is very active with ethanol. Already a number of cargoes in the 15,000 to 20,000 metric ton bracket have been fixed, and we know of a further 80,000 cubic meters or so that will have to be shipped in April. Freights for 5,000 ton cargoes from the U.S. Gulf to Santos are running in the mid $60s/t, but space is irregular.

Transatlantic eastbound is strong and space scarce. Again, ethanol is being quoted, as well as some aromatics. Numbers are inching closer to the mid $60s/t level for 5,000 ton parcels from Houston to Rotterdam. U.S. Gulf to the Mediterranean is proving to be lively with vegetable oils, tallow, aromatics and some base oils. Rates are pushing into the $80s/t for 5,000 ton cargoes from the Gulf to the eastern Med.

U.S. Gulf-to-Far East is slack. There is quite a lot of prompt space available, and freights are weakening. Aromatics are seldom seen, and it may be possible to secure mid $50s/t for 5,000 ton cargoes from the U.S. Gulf to principal Far East ports.

Europe
Things went quiet in the North Sea and Baltic at the very end of last week. This may have been because so many participants set off to attend the petrochemicals NPRA in San Antonio over the weekend. Until that point however, the market was busy.

The same occurred in the Mediterranean. The early part of the week was active but tailed off later on. Prompt tonnage remains fairly scarce in the Med and freight rates have perked up slightly. Mediterranean-to-Northwest Europe is also fairly tight on space. Owners will be glad that biodiesel sellers are able to ship northbound, southbound as well as inter-Med. A truly versatile commodity.

Transatlantic westbound is not that busy, but because there are relatively few spot opportunities not many outsiders are able to go on berth, and this lack of competition means that freights have risen. Moreover, the clean petroleum market is strong and lends support to the parcel trade. Rates for 37,000 ton cargoes from Antwerp-Rotterdam-Amsterdam to the U.S. Atlantic coast equate to over $26/t. We assess the rate for 5,000 ton cargoes from Antwerp-Rotterdam-Amsterdam to the U.S. Gulf as being around $40/t, although there are some reports of high $40s/t being fixed over the past couple of days.

Europe-to-Asia is mostly quiet. The types of cargoes in demand tend to be more specialised ones, such as phenol, chloroform and acrylonitrile. Base oils however continue to be fixed. Rates from Rotterdam to main Far East ports are around mid $70s/t for 5,000 ton lots, but many of the base oils tend to be loading from places like the Black Sea, where rates over $100/t may be needed.

Firm rates are also being seen into India from the Black Sea. Typical vegetable oil cargoes that used to fetch mid $40s/t are now paying high $50s/t. However, the costs of traversing the Gulf of Aden have gone up significantly due to the risk of piracy.

Bunkers too play their part since the bunker bill for any voyage is usually between 50 and 60 percent of the total costs. A ship of 6,000-ton cargo capacity will be consuming between $7,000 and $7,500 worth of bunkers alone per day, irrespective of other overheads and voyage costs. The costs soon mount up on a longer trip, and the bigger the ship the higher the costs. It comes as no surprise to learn that most ship owners are deeply in debt.

Asia
The effects of the Japanese earthquake are beginning to be felt more keenly on the domestic Asian market. The number and range of Japanese plants that have been affected is greater than first thought, and whilst China and Taiwan may continue to import large volumes of aromatics, there have been several subtle changes taking place in the market. Exports of products like caustic and sulphuric acid have dwindled from Northeast Asia as the material is consumed locally instead.

The number of ships open in Northeast Asia is beginning to rise, and there is not enough work for them all. We are starting to see ships now ballasting away from the region, causing downwards pressure on southbound rates. Rates for 3,000 ton cargoes from Ulsan to Singapore are down to low-to-mid $30s/t. Northbound continues to be strong with 3,000 tons of easy chemicals fixed from Southeast Asia to Nantong in the high $50s/t for example.

Inter-Southeast Asia is also considered firm with plenty of work.

Aromatic exports to the U.S. and Europe have been on hold, although there are some signs that Asian prices may weaken, which would open the door again. Palm oil activity is beginning to emerge in April with several major Asian festivals on the horizon to stimulate demand.

Business is booming meanwhile from India and the Middle East Gulf to the extent that westbound space to Europe is severely restricted. Freights are climbing on the back of the tightness, with talk of numbers in the $70s and $80s/t for 5,000 ton parcels to the Mediterranean and Northwest Europe. Eastbound demand is buoyant too, with significant volumes of methanol and MTBE moving. Rates are being pushed into the $60s/t for 10,000 ton cargoes from the Middle East Gulf to Far East.

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 at fix@ssychems.com or by phone at +44 1207-507507. In the London office SSYs Jordi Maymi can be reached at fix@ssychems.com or +44 20 7977 7560.