Routes to the east coast of South America are considered to be a bit tighter now that the last prompt space has been fixed. Ethanol has to be the major attraction, with some of these cargoes mushrooming to 30,000 tons. Pyrolysis gasoline and gasoline have been booked in 10,000 to 15,000 ton quantities into Brazil and Argentina. A 6,000 ton cargo of caustic from the U.S. Gulf to Munguba paid low $60s/t, and some of the regular players would want a rate between $75 and $80/t for a typical 5,000 ton slug of four or five grades of base oils from Houston to Santos or Rio.

Transatlantic eastbound is somewhat flat. Were it not for ethanol, there would be much more open space. As it is, there are still plenty of ships looking to go on berth over the next 10 to 15 days. Rates are still mid-to-high $40s/t for 5,000 ton parcels from Houston to Rotterdam.

U.S. Gulf-to-Far East is looking even tighter on space with all the prompt ships gone, and owners are already reporting heavy contractual nominations for October. Rates are hanging around mid $60s/t for 5,000 ton parcels of easy products, but as soon as anything more sophisticated is mentioned, these levels can easily rise by $10 or $15/t.

Europe
One good week, one bad week seems to have been the pattern in the North Sea and Baltic recently. This is one of the better weeks, spurred on by end-month and end-quarter shipments that have meant the majority of ships are employed into October. Rates too have nudged up slightly in this area. Southbound into the Mediterranean has enjoyed an active session too.

Contrary to fears, Turkish imports have risen, in spite of big increases in some import duties. Base oils seem to be one of the lucky products with lots of enquiries noted. Rates are not excessive though – recent fixtures show levels in the $40s and $50s/t for 5,000 to 7,000 tons of base oils to Turkey, even from the Baltic. But if the demand for other products continues to grow, then such levels may be a bit harder to achieve on another occasion.

Northbound is slow, and there are ships still with space.

Inter-Mediterranean markets are perhaps the biggest winners this week. Some suggest this region is quiet, but we have seen a lot of new chemical business quoted, never mind the surge in vegetable oils, clean petroleum products and base oils. Space is much tighter too.

There is, for example, a 5,000 ton base oil enquiry into Turkey. Two weeks ago, a similar parcel was quoted, and there were 10 workable offers. This time, the charterers are going into a second day of quoting the business. It would perhaps suggest that the rate may end up a bit higher than last time, but it may in fact take a while for owners to grasp that this market really is busier, and until they do, the rates are not likely to change dramatically.

Transatlantic westbound is a long way from being described as busy, but there have certainly been more opportunities than have been seen for a while. Freights have stiffened a bit too, with some of the 5,000 to 6,000 ton parcels of easy products such as caustic going in the mid-to-high $30s/t.

Europe-to-Asia has seen some major gains in freight on the back of a jump in demand for all types of material. Numbers are up perhaps by as much as $10/t over the previous week, with levels of mid $80s/t discussed for 5,000 ton parcels from Rotterdam to principal Far East ports. We are aware too that if prompt dates are required, then rates can easily be over $100/t for such movements.

Europe-to-India and Middle East Gulf have seen some modest gains in freight too, inspired by more vegetable oils from the Med, the reappearance of pyrolysis gasoline into the Middle East Gulf, as well as good volumes of phosphoric acid into India and even some base oils into the Middle East Gulf.

Asia
Space remains tight across many of the Domestic Asian routes, to the extent that many requirements are now quoted with second half October loading dates in an effort to find available space. The main grades are still styrene, paraxylene and mixed xylenes, although toluene has surfaced recently too. Rates are said not to have increased, but if the tight situation persists, owners will likely seek to address that.

Export demand is concentrated heavily on palm oil and biodiesel, with less interest in aromatics, although sulphuric acid continues to be quoted into the Americas. Rates for palm oil are the main drivers for all export rates at the moment. A couple of 18,000 ton cargoes of palm oil from the Malacca Straits to Northwest Europe were fixed at around $104/t this week, which sets the standard for all other cargoes.

In theory, rates for 5,000 ton parcels of aromatics from Korea to the U.S. Gulf are around $60/t these days, but in reality only owners who are on berth and scheduled with space will be interested at that level. Most other owners will reject the parcel rates in favour of full cargoes of palm oil.

It had been hoped that Indian demand for palm oil would slow after the Diwali festival on 26 October and therefore free up more tonnage, but so far there seems to be no sign of it happening, especially after Indonesia slashed export duty on processed palm oil exports, making them more attractive to Indian customers.

The Middle East Gulf-India markets are however still very quiet. There is not a great deal happening at the moment either on the westbound nor the eastbound routes, and rates are weak.

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.