Routes to Asia are where the biggest increases have been recorded. From Houston to main Far East ports, 5,000 ton parcels are well into the $80s/t, and even large cargoes such as 10,000 tons secure only moderate rebates. Aromatics and styrene are among the most active of all products being shipped.

Transatlantic eastbound also sees freight nudging upwards. Levels for 5,000 ton cargoes from Houston to Rotterdam are nearer to mid $40s/t, and could rise quite quickly. Most of the demand centers on ethanol cargoes of 10,000 to 20,000 tons. It only takes a few of these to get fixed per week, and the overhang of tonnage in the U.S. Gulf would be eradicated completely. We are almost at that point.

U.S. Gulf-to-South America too is attracting interest in moving ethanol in large lots, and there is just not sufficient tonnage to go around if all the deals are successful. Gulf-to-Caribbean and inter-Caribbean routes are roughly stable, but as tonnage is drafted onto other routes, there is a chance that this region too may end up seeing higher levels. Clean petroleum products and palm oils are pretty active already, and unsurprisingly there are a number of ethanol shipments too, such as from Trinidad to the U.S. Gulf, which will undoubtedly maintain the pressure on rates.

Europe
There have been quite a large number of new cargo opportunities within Europe, yet many owners feel obliged to carry on fixing at very competitive rates. It is quite surprising really, given the fact that most vessels are probably operating in the red, especially since the cost of bunker fuel has stopped falling and is pushing back up again.

All owners have a different philosophy as to how to approach the market, but one summed it up nicely this week saying that all his ships had been fixed past the mid month point, and when offering for future business past that time frame they were reluctant to insist on higher freights because of the risk of having the ships back open prompt again. In effect, take what you can get while it is there because there may be nothing next week.

There will have to be a very substantial increase in the amount of new orders for owners to be truly convinced, and these brief periods of heightened activity such as we see right now within Europe are not concrete enough for them to brave higher freights.

Deep-sea business out of Europe is also a bit better. Transatlantic for example sees a lot of base oils enquiry to the U.S., Caribbean and South America, and a number of these cargoes have been booked. There are several large lots of sulphuric acid competing for space in this direction, as well as bigger lots of urea ammonia nitrate, molasses and also smaller volumes of biodiesel, acetic acid and vegetable oils. Rates are holding in the low $40s/t for 5,000 ton volumes, but space is a little tighter so we shall see, especially if traders do start to ship benzene again.

Europe/Asia is another interesting route. November space is pretty well taken care of, but charterers are unwilling to inflame freights further by flooding the market with enquiries, even though November loading is preferred.

Currently, rates for 5,000 ton lots from Rotterdam to principal Far East ports are in the region of $90/t. Owners with outside tonnage, or ships that have an open program are talking numbers in excess of $100/t, so charterers in turn are exploring December loaders to try and keep freights down. Base oils are part of this rush to ship to Asia with a number of requirements seen. Other cargoes include ethylene dichloride, phenol, acetone paraxylene, mixed xylenes and glycol.

Demand is reasonably buoyant too into India and the Middle East Gulf, especially with pyrolysis gasoline, acetic acid, phosphoric acid and a few base oil requirements.

Asia
There has been a perceptible increase in the amount of domestic Asian trade quoted this week. One of the major reasons has to be the restarting of a number of sizeable plants, particularly in Taiwan, which has spawned a number of aromatics shipments as well as products such as butanols. Base oils have been fairly active out of Taiwan too.

Freight rates have not risen however, with typical 3,000 ton cargoes from Ulsan to South China fetching $28 to $30/t for example, and just $33 to $35/t to Singapore.

Looking ahead a bit, a number of Chinese aromatics refineries are scheduled to restart production imminently. The net impact is that for now, China will continue to import both local and overseas material, but eventually trade will settle down more into a regional business and fewer deep-sea imports will occur. Commodity prices are already dropping in Asia on aromatics and narrowing the arbitrage with the U.S. and Europe.

The Middle East Gulf region is also seeing a number of plants restart operations after maintenance, and this production is now looking for a home. As far as the space situation goes, palm oils are still so busy that most suitable ships are snapped up into this trade, and the rates therefore govern those that are paid in the chemicals and base oils markets.

There are not so many ships for example available to take chemicals or base oils to Europe or the U.S. from Asia, and numbers continue to be well over $100/t for 5,000 ton parcels. Recent base oil activity from Iran to the Mediterranean suggests similar freights are payable for 5,000 ton shipments.

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.