Gulf-to-the east coast of South America has been a refuge for some owners, thanks chiefly to ethanol trades, but not all the ships are full, and there is still a fair amount of open space remaining on scheduled tonnage, without having to call on the hordes of open ships in the U.S. Gulf.

Transatlantic eastbound cannot shrug off the layer of lassitude, and every time that some trader business looms, such as styrene or BTX, the gods who govern the arbitrage window frown and successfully block most opportunities. Without the ethanol trade, this route would have sunk even lower. As it is, 5,000 ton parcels from Houston to Rotterdam can easily obtain freight in the region of $45 to $47/t.

Gulf-to-Far East has seen just about every serviceable ship fixed away for September, leaving just a few gaps on ships that do not have approvals. There are a large number of potential aromatic cargoes but most of these require approvals. Owners are also choosy as to which load/discharge ports to use, but if you hit it right you can find some very competitive numbers, well below the mid-$60s/t that is the market rate for 5,000 ton parcels. The converse is true too, and you may be faced with figures well into the $70s/t.

Europe
It has been a slower week than the previous one. Contractual volumes have been adequate in the North Sea and Baltic, but spot business has declined. The southbound market into the Mediterranean, especially into the Eastern Med, had been expected to quieten following the proposed hikes in import duty in Turkey. Base oils were one of the commodities targeted with an immediate increase but this has not deterred traders who continue to fix base oils into Turkey from Northwest Europe and the Med.

Northbound from the Med has been a bit dull while inter-Med services have been reasonably busy, and the majority of owners have covered their ships forward by a week to ten days. Rates are reported to be fairly competitive however, suggesting that this market is still perceived as fragile by owners.

Transatlantic westbound did not bring anything new to the market. There have been occasional cargoes of benzene, caustic or naphtha but never more than a trickle. Base oils however have been enquiring into the U.S. Gulf, Mexico or Venezuela.

Europe-to-Far East is now very tight on September space, and even some of the early October loaders are already out firm on their remaining space. Aromatics such as paraxylene, orthoxylene, mixed xylenes and styrene are behind the demand, along with smaller requirements for phenol, acetone and butanols. Rates are around $75 to $80 for 5,000 ton lots, depending upon the port in Asia.

There has been a fair amount of styrene quoted from Europe to India too, along with toluene, xylene and acetic acid. Levels work out at around mid $60s/t for 4,000 to 6,000t lots.

Asia
There has been so much activity on the domestic Asian market that nearly every route is tight for September. Paraxylene is especially busy into Taiwan and China, and charterers are now quoting early October stems due to the scarcity of tonnage. The situation is not helped by the number of ships that took palm oil cargoes into the Indian Ocean where they are now languishing, finding it hard to get cargoes back to Asia again.

Where September dates are critical, expect to pay a substantial premium to secure a ship on the right dates.

Export demand is also fuelling the tightness. On the chemical front there are benzene and sulphuric acid cargoes to the Americas, the benzene going to the U.S. and the acid primarily to Chile or Brazil. It is the palm oil market however that is really driving this market, and owners are bragging about fixing rates well in excess of $100/t for 20,000 ton cargoes to Northwest Europe. What they perhaps fail to mention is that they may have ballasted their ship half way round the world to get into the Malacca Straits to load, which takes the shine off the rates somewhat.

As mentioned, the Middle East Gulf-India market is beginning to sag from the influx of palm oil ships, while demand to transport chemicals back to Asia has not really picked up since Ramadan. Various plants are not operating fully, and lifting from Iran is not to everyones liking. There are reports however that suggest China should begin importing more methanol shortly, which may help this route.

Westbound space to Europe is balanced to tight.

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.