U.S. Gulf-to-east coast South America is rather sedate. There is less ethanol being fixed, but this is expected to change as Brazilian ethanol prices are high and imports may be necessary.

Transatlantic eastbound rates have continued to erode. There have been at least three fixtures of styrene to Europe, each of 5,000 to 6,000 tons, over the past week, but rates have been competitive – $44 to $46/t or thereabouts, which are competitive levels, given that all the cargoes load from the Mississippi or Lake Charles, La. Ethanol is still being shipped to Europe, but the number of new requirements has dwindled. At some point later in the month, the tonnage supply will look a little more balanced and the market may bottom out, but for now there are still too many ships and too few cargoes.

U.S. Gulf-to-Far East, however, has been active and virtually all the October scheduled space is full. Rates have been working out at around $65/t for 5,000 ton parcels from the U.S. Gulf to Mainport Far East, but this may rise as outsiders may be required to step into the breach, for which they typically ask at least $10 to $15/t more.

Europe
A major industry event took place last week (the European Petrochemical Association’s annual meeting) that effectively stifled trade within Europe until the later part of the week. The picture is slowly unfolding, however, and it would seem that the North Sea and Baltic is running fairly well and most ships are reasonably well covered. Rates are flat, however, and show no deviation from the current trend. Europe-to-Mediterranean is nicely balanced too.

There have been some base oil requirements into Turkey but the number of enquiries is tapering off following the recent change in import duty. Northbound has seen little excitement this week. Inter-Mediterranean business has kept going and the last few days have seen most of the really prompt tonnage manage to latch onto something. Clean petroleum has been particularly helpful in the Mediterranean, coming to the rescue of quite a lot of ships, while vegetable oil from the Black Sea has assisted to a lesser extent.

Transatlantic westbound is weak, and apart from some benzene and caustic requirements there is not much happening. Europe-to-Asia is busy in October. The majority of scheduled ships are full, which has presented outsiders with a great opportunity and at least five to six smaller ships have taken advantage of the situation. Cargoes such as phenol, acetone, aromatics, ethylene dichloride and butanols have been plentiful and rates are solid.

Europe-to-India and Middle East Gulf has seen aromatics, pyrolysis gasoline, vegetable oils, phosphoric acid and even a couple of base oil possibilities. Rates for 2,000 ton parcels from West Mediterranean to west coast India are in the region of $85 to $90/t.

Asia
The week-long holiday in China had the effect of freezing the domestic Asian market for much of the past 10 days. Even after the holiday, however, there is an air of uncertainty about Asia. The fear of holding onto expensive stock haunts many, which has resulted in some cargoes being re-exported from China. Aromatics are prone to such price swings and we are just starting to see evidence of this occurring.

The benzene arbitrage to the U.S. has disappeared for now, but there continue to be large lots of sulfuric acid to Chile and Brazil. There has even been an enquiry to shift 8,000 tons of base oils from Taiwan to the U.S.

Palm oil business is reported to be slower into India, and there are reports that suggest that stocks in Malaysia are now higher than normal. It is possible that sellers may be forced to drop palm oil prices in an attempt to shift the surplus and thereby provide a welcome boost for ship owners.

The Middle East Gulf-to-India region has been afflicted with numerous plant stoppages, both scheduled and unintended, which has resulted in less outbound business, especially to Asia. Some of these outages appear to have been resolved, and a few new enquiries have started to appear. Possibly because there have been fewer palm oil shipments into the region, the pool of tonnage available for outbound business is now not as large as before and freight rates appear to have bottomed out.

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.