There is plenty of open tonnage in the U.S. Gulf over the next week or two, governing freight rates. Europe also had a much slower week, exerting downwards pressure on freights. Asia remains quiet.
U.S. Gulf of Mexico
The lower Mississippi has reopened to barge traffic, with restrictions, but it has been too late for some chemical plants that had to stop due to delayed feedstock deliveries. A number of deep-sea shipments have also been cancelled, which has left a number of prompt ships in the lurch.
On the transatlantic leg, ethanol continues to head across to Europe, but rate levels have dropped to upper $50s/ton for 5,000 ton cargoes. Contractual volumes are, as expected, stronger for June and so numbers may begin to level off, especially if benzene/toluene/xylene, glycol and cumene cargoes continue to be quoted.
There is plenty of space from the U.S. Gulf to the Caribbean, but rates have strengthened a bit on the Brazil and Argentina routes; 5,000 ton lots from Houston to Santos are now going for mid $70s/t.
U.S. Gulf-to-Far East has bottomed out, with a few traders looking at aromatics again. Levels for 5,000 ton lots are up a bit to $53 to $55/t from Houston to principal Far East ports.
Europe
It has been considerably quieter within Europe this week, with more prompt tonnage appearing than was the case last week. The North Sea and Baltic region is not so bad perhaps, there being sufficient parcels such as ethanol, FAME, paraxylene and caustic. Southbound into the Mediterranean however produced a couple of rare ships with open space, although in general this lane tends to be busy enough that freights have not changed much.
It is within the Med that the market has withered. There is far less in terms of Black Sea business, for example, whether chemicals or oil products. In the western Mediterranean, a number of prompt positions have appeared, with owners letting the rates slide a bit in order to get all their ships covered.
Transatlantic westbound has not been that busy either. Apart from urea ammonia nitrate, there have been some paraxylene, orthoxylene and a couple of base oil requirements. Freights have slipped into the upper $30s/t for 5,000 ton parcels from Rotterdam to the U.S. Atlantic coast. Mediterranean-to-U.S., however, is tight on space, and some very firm levels have been reported on parcels of pyrolysis gasoline and caustic to the U.S.
Europe-to-Asia and Europe-to-India have been disappointing with reduced demand on both trade lanes. Typical freights to both destinations have slipped by $2 to $3/t over the past week or two.
Asia
Domestic Asian markets are quieter than they ought to be. There may be a fraction more business out there this week, or at least some of the end May ships have found a bit more employment, but rates tend to be weak all the same.
There have been a surprising number of caustic enquiries southbound into Southeast Asia from China, while aromatics have been a bit more active into Taiwan. Northbound is slack however, with limited demand showing from China just yet.
Export businessremains firm. Benzene and styrene are still seen looking to ship to Europe, along with acetone, acetic acid and cyclohexane. Large lots of sulphuric acid have been noted enquiring from Asia to Brazil, Chile and Peru. Benzene/toluene/xylene, too, has been seen from Korea to the U.S. Gulf for June.
The Middle East Gulf-India region is still very busy in both directions, and freights are very firm. A 10,000 ton cargo from the Middle East Gulf to Antwerp-Rotterdam-Amsterdam can easily command freights in the $80s/t, and 10,000 ton lots eastbound to China have been fetching rates in the $80s/t too.
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.