U.S. Gulf-to-east coast of South America has slipped a bit after a long run of tightness. Contract volumes seem to have taken a hit, and we are seeing interest from owners in many cargoes, including base oils. Rates are down somewhat, and it may be possible to book 3,000 ton parcels from the U.S. Gulf to northern Brazil in the low $70s/t, or less.

Transatlantic eastbound remains distinctly muted. A number of ships are entering their sixth week without employment in the U.S. Gulf. Some traders anticipated styrene to be in short supply in Europe and had hoped to alleviate the situation with imports from the U.S. Gulf, except it may just be a little premature. Rates are barely above $50/t for 5,000 ton parcels from Houston to Rotterdam.

The corner may have turned on the Gulf-to-Far East route however. August space is beginning to look a lot leaner as owners register better contractual volumes. Aromatics are busier on the spot market too, with mixed xylenes and paraxylene being seen, as well as styrene. There are reports of $59 to $61/t agreed for 5,000 ton parcels from the U.S. Gulf to principal Far East ports, but there are also opportunities to get a little less than that.

Europe
There is still sufficient cargo in the North Sea and Baltic for the bulk of the fleet, and although some of the cargoes may not be sexy ones, being low-to-moderate paying such as biodiesel and ethanol, most ships have been able to evade idle time.

The Mediterranean market is really where its at in Europe, in spite of Ramadan and the holiday season. It is rare to see prompt tonnage in this area, and freights have a firm tendency, whether from west to east or east to west. Chemicals, vegetable oils, biofuels, base oils and clean petroleum products are all active.

Transatlantic westbound on the other hand is slack and full of ships able to offer part-cargo space. Numbers have fallen a bit more since last week, with a 4,000 ton parcel of chemicals from Antwerp-Rotterdam-Amsterdam to Savannah going for just $38 to $39/t.

Europe-to-Far East is showing solidarity with the U.S. Gulf-to-Far East route, and a number of new enquiries have been spotted, including base oils, ethylene dichloride, phenol, butanol, butanediol and crude benzene. Space has also tightened a notch for August, and there is not so much scheduled space left. There are plenty of outsiders around, but it will take a bit higher freight levels to make them want to risk going on berth.

Asia
A slight improvement has been detected in the domestic Asian market. China is again the destination for a growing number of cargoes, including styrene, MTBE, phenol, acetone and mixed xylenes. Paraxylene too is quite active into China, Taiwan and Southeast Asia, in spite of reports that prices were falling due to a decrease in demand. Here and there, rates are marginally firmer for coastal business.

Export trades are dominated by palm oils and biodiesel. A colossal amount of tonnage has been sucked into supplying India, Pakistan and Bangladesh with palm oil, causing freights to remain quite strong in this sector. As tonnage tightens, and there are not so many ships coming into Asia from either Europe or the U.S., palm oil rates to other destinations such as the Mediterranean and Europe also register increases.

Certainly levels of low $90s/t have been done on 15,000 tons of palm oil from the Malacca Straits to the Black Sea, but there are also stories of higher levels, as yet unsubstantiated. In turn, the pressure on space makes itself felt on other export cargoes such as sulphuric acid, aromatics and even the fledgling base oil export market from Asia to the U.S. and Europe. Freights on these kinds of cargoes have to keep up with those paid by palm oil charterers, or owners will simply target palms instead.

The Middle East Gulf-India region had a somewhat quieter kind of week. Tonnage remains limited to Europe, but there are a lot of ships for anyone wishing to fix back to Asia, so long as they can accept palm oil as a previous cargo. Small parcels continue to see levels in the $80s and $90s/t for 1,000 ton lots from the Middle East Gulf to Asia, depending upon actual ports, while 5,000 to 10,000 ton sizes go for numbers in the $40s and $50s/t, again depending upon ports.

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.