Business is looking better in the Americas with fewer idle ships around. Europe has entered a spell of steady activity too. Asia is a bit quieter however, especially in domestic trades.
U.S. Gulf of Mexico
It is apparent that that the pool of open tonnage in the U.S. Gulf has finally melted away, and there are reports of firmer freights being paid in the Gulf-to-Caribbean markets for example. There are quite a number of small clean petroleum product cargoes, mostly under 15,000 tons in size, and these are occupying a large part of the Caribbean fleet.
Gulf-to-Brazil too has noted freight increases of around $2 to $3/t that take the benchmark rate for 5,000 ton parcels from Houston to Santos into the mid $60s/t. Ethanol has become a regular feature, but there are also enquiries for acetone, caustic and MTBE.
Transatlantic eastbound also appears to have bottomed out finally. Numbers are fractionally higher at around $45/t for 5,000 ton cargoes from Houston to Rotterdam, but there are examples of rates in the $50s/t for ports that are unscheduled. Ethanol and biodiesel are the two most common grades quoted.
Gulf-to-Far East continues to see growth in demand, both for spot business as well as contractually. November space is very scarce, and those owners with space are looking to inflate their freight ideas into the mid $90s/t for 5,000 ton cargoes to China. Until recently, this route would have fetched mid $70s/t. Products such as paraxylene, mixed xylenes, acrylonitrile, glycol, phenol and acetone are the main commodities on the move.
Europe
There have been no great changes to the North Sea and Baltic markets over the past week or two. There is a fair amount of business quoted, and ships are generally able to fix several days in advance, though freight rates have hardly altered. There is some prompt space southbound into the Mediterranean, while northbound is mostly routine business.
Inter-Med trades are balanced. Base oils from the Black Sea into Turkey are sluggish, but there are still a number of other base oil shipments from places like Augusta, Livorno and Spain.
Transatlantic westbound seems to have followed the lead of the oil markets where higher freights are being implemented. Cargoes that were going for mid $30s/t are now paying $40/t, and there are even reports of 5,000 tons of base oils from Europoort to Houston that fetched mid $40s/t. In fact, there are a number of base oil requirements into the U.S. Gulf and Caribbean this week, whether from the Baltic, Mediterranean or Northwest Europe.
Europe-to-Far East is active, and November space is certainly scarce. Traders have been trying to fix aromatics and easy chems, but freight levels prevent the business from being finalised. Many charterers are waiting until end November or early December when the scheduled carriers have space again and freight levels should once again descend into the $80s/t for 4,000 to 5,000 ton cargoes from Rotterdam to principal Far East ports.
Only the regulars are showing space on the Europe to India-Middle East Gulf route, though the Diwali celebrations did cause things to slow a bit. Base oils, benzene, pyrolysis gasoline, acetic acid and phosphoric acid are the mainstays of this trade.
Asia
It has not been that busy in the domestic Asian market over the past few days. Some cite poor demand, and this may be partly responsible, as could be the fiscal tightening from China. But it may be linked more to falling commodity prices and buyers holding back in favour of lower prices in the future.
Northbound sees the usual aromatics cargoes into China and Taiwan from Indonesia and Thailand, as well as MTBE into Korea. Southbound is quiet, though there are cargoes such as styrene and aromatics. Clean petroleum products are flat inter-Southeast Asia, and the owners of those vessels are attempting to muscle into the chems trade in the region, putting some pressure on freight levels.
Export business from Asia is calm apart from biodiesel and palm oil, but demand for those products is strong and rates firm. Numbers being paid for 15,000 ton cargoes of palm oil from the Malacca Straits into the west coast of India are running in the upper $30s/t, with rates in the $70s and $80s/t for the Med and Northwest Europe. Such rates have become established as the benchmark level, and owners see little point in accepting lower rates for chemicals if they can switch to higher levels in the palm oil business.
There have been a few signs that freights are starting to firm again in the Middle East Gulf-India markets too. The supply of cargoes has been steadily increasing as more plants come back up online after major stoppages. Eastbound for example sees numbers back into the $60s/t for 4,000 to 5,000 ton cargoes from the Middle East Gulf to main Far East ports, while westbound rates essentially remain strong in the $70s/t for similar parcels.
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.