U.S. Gulf of Mexico
The severe flooding on the upper reaches of the Mississippi has been causing much consternation further down the river with a number of installations having stopped operations or preparing to stop. The floodwaters are only expected to reach the lower parts within a week or so, but the levels will remain high for some time afterwards. Shipping is therefore not moving as there are bridges to negotiate, with owners concerned that they will be stuck either side, depending on what happens.

Other parts of the U.S. Gulf are also affected since a lot of material makes it way either up or down the river by barge, and charterers are unwilling to commit to cargoes that may be held up or delayed. This comes at a time when the Gulf is full of May ships, many of which have not fixed anything. It is a very different picture to April when space was ultra scarce. So far, owners are unwilling to drop the levels, but it may only be a matter of time.

U.S. Gulf-to-Caribbean is slower, both contractually and spot-wise, and will not absorb any of the surplus tonnage. U.S. Gulf-to-Brazil is the same. Space is well booked, but there are not many large parcels to act as lures to entice vessels onto the route.

Transatlantic eastbound continues to see some ethanol shipments as well as styrene, biodiesel and even benzene/toluene/xylene. Rates have been holding in the mid $60s/t for 5,000 ton lots of ethanol from Houston to Rotterdam, but 10,000 tons of benzene from Houston to Rotterdam was heard to have gone in the low $50s, a sizeable drop from a similar fixture the week before.

U.S. Gulf-to-Far East is disastrous for owners, levels having falling to around $40/t for 10,000 ton lots of benzene/toluene/xylene from Houston to principal Far East ports. June promises to be tighter at this stage with strong contractual nominations being received, but it is little consolation for those left with open space in May.

Europe
Things have been a bit brighter on the European coastal scene. Contractual demand is strong on most routes, and spot demand has been robust. In the North Sea and Baltic, there have been a lot of ethanol, biodiesel and aromatics, while southbound into the Mediterranean has seen a strong performance from acrylonitrile, biodiesel, MTBE and base oils.

Northbound out of the Med has been busy while inter-Med markets have gone bananas. Only a couple of months ago every firm requirement would have produced at least half-a-dozen suitable offers. Nowadays, there are just a handful of prompt ships spread throughout the entire Mediterranean, and owners are learning to ask for higher freights. It is not just chemicals either; acids, urea ammonia nitrate, clean petroleum and vegetable oils have all woken up in the Med.

Transatlantic westbound is a little quieter off the Continent, but rates are climbing furiously for loading from the Med to the U.S. Gulf. A 5,000 ton cargo of pyrolysis gasoline from Italy to the U.S. Gulf recently fetched $88/t, but a similar cargo for loading a couple of weeks later is facing levels of $100/t.

Europe-to-Asia is none too busy on the spot market, but contractual commitments have been quietly cornering the available space to the extent that there is very little space left for May. June looks to be busier too, and we think freights might bounce up slightly, although levels for 5,000 ton parcels from Rotterdam to Far East main ports still fall short of $80/t.

Asia
Public holidays have affected the domestic market in Asia this week. All the same, there has still been a flow of small lots of styrene, mixed xylenes, acrylonitrile and butanols into China from Korea and Taiwan. There was even an astonishing enquiry for a single shipment of 30,000 tons of paraxylene from Taiwan to China. June is said to be looking busier in Asia with a growing list of enquiries noted.

Export business has been producing a lot of benzene, cyclohexane, acetic acid, acrylates and biodiesel to Europe. Rates for 5,000 ton parcels from Ulsan to Rotterdam are now into the upper $80s/t, assuming tonnage to be available on the loading dates, but even higher levels have been heard if the dates do not coincide with the ship. Palm oil demand continues to be buoyant into both India and the Mediterranean.

India and the Middle East Gulf are very active, and freights are still going up – 10,000 ton cargoes from the Middle East Gulf to Turkey have been paying in the $80s/t, and some owners are claiming to have achieved $135 and $145/t for 3,000 ton parcels from the west coast of India to Turkey. Eastbound into Asia is more moderate, but with plenty of methanol, MTBE, aromatics and ethanol to be shipped the rates continue to be firm.

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.