Europe fared a bit better over the past week in terms of new business quoted. It has been the same in the Asian market where space has tightened on some routes. U.S. markets on the other hand remain soft, or have indeed become even quieter.
U.S. Gulf
September is turning out to be a slow month on the U.S. Gulf of Mexico-to-Caribbean service. Contractual volumes are sparse and there is quite a lot of open space coming up later in the month. Spot volumes are nowhere near sufficient to fill all the available ships, and observers say it is likely that freights will begin to drift downwards soon. U.S. Gulf to east coast South America is similarly affected, and there are several ships with space later this month. Ethanol and caustic are the main commodities moving. Freight rates currently rest in the vicinity of mid $60s per metric ton for 5,000 ton parcels from Houston to Santos.
Transatlantic eastbound is finding it hard to service all of the ships that are on berth to Europe. There is simply not enough business for them all, and we have seen several units ballast back to Europe empty. Rates are sliding, with 5,000 ton parcels from Houston to Rotterdam going for around $46/t. Fortunately, ethanol continues to head across to Europe. Styrene has been attempted, and pyrolysis gasoline too, but few end up as fixtures.
U.S. Gulf-to-Far East is a peculiar route. For a long time, many of the scheduled carriers on this service have been reporting full ships, but now it seems that a couple of cargoes booked previously have been dropping out. To fill up the space at short notice, owners have been willing to accept low $60s/t for 5,000 ton lots from Houston to Mainport Far East. Yet once that space has gone, the route will be tight again for the month and owners may revert to quoting levels of around $70/t again.
Europe
The mood has been a bit more upbeat in Europe over the past few days. The North Sea and Baltic region are reported to be receiving a lot of attention from charterers looking to move material in September, and a number of regular players have no more prompt space. Southbound routes into the Mediterranean have been a bit busier too, although a look at some of the freight rates fixed would suggest otherwise. It seems there have been several owners very keen to reposition their ships back into the Mediterranean and have accepted rates for example of around 27 for 5,000 tons of easy chemicals from Rotterdam to west coast Italy, whereas others were quoting 33/t as the lowest level.
Other owners worked on 3,000 tons of aromatics from Rotterdam to Spain at around the same level, which is quite a firm level for such a benchmark cargo. Base oils have again been active on this route, with cargoes moving from the Baltic, North Sea and the West Mediterranean into Turkey and Egypt. Northbound is a bit flat but inter-Mediterranean activity has been better, although rates had to be pitched aggressively for owners to capture some of the business. Going forward, there are fewer ships open in prompt positions that might cause rates to rebound over the coming days, depending upon whether the volumes are sustained. Transatlantic westbound is very poor with just the occasional scrap of caustic, paraxylene or benzene reported. Numbers are weak as a result – 5,000 ton parcels of easy chemicals from Rotterdam to Houston are now paying less than $35/t.
Europe-to-Far East is where all the action has been with a large number of ships fixed, easing the oversupply in Europe. Aromatics such as paraxylene, mixed xylenes and cyclohexane have been recorded as well as yet more cyclohexane, phenol and acetone. Base oils have made their mark with a couple of cargoes fixed to southeast Asia. Europe to India has not been so good though, and several ships remain with space from Antwerp-Rotterdam-Amsterdam, taking levels down into the mid $60s/t for 5,000 ton parcels from there to west coast India.
Asia
It has been a bit brighter in the Asian markets this week. Domestic markets have seen a surge in demand, with cargoes such as paraxylene, styrene, toluene, caustic and phenol being shunted around intra-Far East. The trade from Northeast Asia to Southeast Asia and back up again is looking more positive with ethanol, styrene and mixed xylenes southbound, and pyrolysis gasoline, solvent naphtha C9 and MTBE back up again.
Space is reported to be tight within Southeast Asia too, where styrene, benzene, pyrolysis gasoline, methanol and base oils have been seen. For example, 3,000 ton parcels from Singapore to Thailand have been fetching around $30/t. Export demand is a bit happier too, with benzene and wax being fixed to the United States, sulfuric acid to South America and biodiesel to Europe.
In addition, the small parcels traffic to the Mediterranean and Northwest Europe has returned with enough volume to bring a couple of ships on berth for September and October. The Middle East Gulf-India region has been a bit disappointing, however, and is still not back into its usual rhythm following the end of Ramadan. Westbound has been the more stable of the two routes with caustic, glycols, ethanol and methanol seen, as well as attempts to ship base oils into the Mediterranean from Iran. Eastbound, however, has been flat, and space can easily be found for September loading.
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.