It has been another tough week for ship owners who have vessels open in the U.S. or Europe. With good demand reported, Asia is by far the better location in which to have open tonnage.
U.S. Gulf of Mexico
There has been some additional activity in the Gulf-to-Caribbean trade this week, although rates appear to be stable, probably because there is still adequate tonnage available in the area. A couple of base oil cargoes can be counted among the new bits of business, including a fixture into Mexico and some enquiries into Venezuela.
U.S. Gulf to the east coast of South America continues to see ethanol as the main commodity, with methanol a possibility too. Rates are basically unchanged on this route.
Transatlantic eastbound is grim, and there are still too many ships on berth. In several instances, owners have been forced to relet to other owners the few cargoes they have managed to fix simply because there has not been sufficient other cargoes with which to fill the ships. Rates continue to creep lower as a result, and 5,000 ton parcels from Houston to Rotterdam are now seeing numbers that are under $50/t.
U.S. Gulf-to-Far East continues to display a degree of firmness in freight levels. Styrene and xylene appear prominently on the cargo lists, and rates have rolled forward into September, with owners fixing 5,000 ton cargoes from Houston to main Far East ports at around $70/t.
Europe
Spot market volumes for the higher-paying sophisticated parcels are still subdued in the North Sea and Baltic, and owners are scrambling around to fill their ships with easy grades such as FAME, pyrolysis gasoline and ethanol.
Southbound into the Mediterranean sees several vessels holding prompt space, although the owners do not quite see eye-to-eye with the charterers as to the value of that space. Northbound from the Mediterranean to Northwest Europe sees some aggressive rates being done, with low $40s/t talked on 3,000 to 4,000 ton parcels from Italy to Antwerp-Rotterdam-Amsterdam.
Inter-Mediterranean chemical activity is stable, whilst the drop in vegetable oil demand has been compensated by a slight improvement in the amount of clean petroleum business conducted in the region.
Transatlantic westbound has produced very few new requirements this week. UAN and naphtha-type cargoes are probably the main grades discussed, with mention too of some wax and base oil possibilities into the U.S. Gulf. Rates are weak, with 5,000 ton parcels of easy chemicals from Rotterdam to Houston being picked off in the mid $30s/t.
Europe-to-Far East is tight on prompt space, and owners are looking to raise rates. Styrene, reformate, phenol and acetone have been discussed into China, with owners no longer willing to accept levels in the mid $70s/t for 5,000 ton parcels. A few more vegetable oil parcels have been seen into India and the Red Sea, and a couple of small base oil parcels have been noted too.
Asia
Asia continues to be one of the few regions that can boast of a steady supply of cargoes. Consequently, many owners are looking to reposition ships into the region, which will ultimately cause its downfall. At the heart of the matter are strong palm oil and biodiesel demand, and whether to ship only as far as India or China or on long-haul routes to Europe, the Americas and West Africa. Indian demand is buoyed by the wish to stock up prior to the Diwali religious festival and may therefore start to slow soon.
Another factor is the price of palm oil in relation to other edible oils, notably sunflower and soybean oils. It is estimated that South American sellers will be more aggressively seeking market share later in September which might rob the palm oil sellers of some business.
On the other hand, biodiesel made from palm oil tends to slow down in the colder months, but this year sales may continue strong because Argentina, one of the main biodiesel exporters, is facing a possible shortage of biodiesel brought on by a domestic shortage of its feedstock methanol. Already, attempts are being made to import methanol into Argentina to augment local production. Meanwhile, there is steady demand for ships to haul sulphuric acid from Asia to the Americas, as well as all the small chemicals parcels traffic within Asia that keeps the local coastal fleet busy.
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.