Fewer fixtures were seen out of the U.S. Gulf this week, undoubtedly as a direct consequence to the shortage of available space. The European market feels quieter too, though space is not always easy to find. Asian markets are busy, both deep-sea and short-sea.
U.S. Gulf of Mexico
The amount of fixing that took place over the past week out of the U.S. Gulf is considerably less than the week before. Much has to do with the tightness of vessel space in the area, which renders it rather pointless quoting cargoes to certain destinations.
It also has to do with freight. Even though space is scarce, charterers object to owners overly-inflating freight rates, and a number have backed off to wait for next month. However, it is still too early for many owners to know what their space situation is going to be like in March.
There has also been a weather factor over the past week. Severe weather conditions, even in the U.S. Gulf, have caused port operations to run slower with a number of plant issues as well as frozen lines causing delays to vessels scheduling.
Looking at the individual trade lanes, eastbound transatlantic is busy with a large number of quotations for benzene, toluene, styrene, ethanol and biodiesel. Interestingly however, there are still a number of ships that have bits of space and have not filled completely. We therefore suggest freights for 5,000 ton cargos from Houston to Antwerp-Rotterdam-Amsterdam are unchanged from the low $60s/t that we assessed last week.
Gulf-to-east coast South America is extremely tight on space, whatever anyone else intimates. There is a lot of demand for styrene and caustic, but users have been looking at sources other than the U.S. for supply since shipping space is so tight. Numbers are notionally in the mid $60s/t for 5,000 ton cargoes from Houston to Santos, but even higher levels may be encountered.
U.S. Gulf-to-Far East has slowed, and there are indeed several ships holding pockets of February space. Rates for 5,000 ton cargoes from Houston to principal Far East ports are more akin to low $60s/t, and of all the U.S. rates stand the greatest chance of slipping.
Europe
There has been a distinct slower feel to Europe over the past few days, although it does not automatically imply rates are sagging. On the contrary, levels in the North Sea and Baltic have probably increased slightly. Contractual volumes and bad weather delays have tightened things somewhat.
The same seems to be true going southbound into the Mediterranean where there is a high level of demand. Northbound from the Med rarely outshines the southbound leg, and this week was not one of them. Business within the Med gives the impression of being sloppy, and for some cargoes it is possible to challenge the rate levels, though owners are tending to dig their heels in due to bunker increases.
Transatlantic can be categorised as steady. There are not a great deal of commodity chemicals, although there have been some larger lots of naphtha, pyrolysis gasoline, caustic and hydrocracker bottoms. Rates for 5,000 ton cargoes from Antwerp-Rotterdam-Amsterdam to Houston are just over the mid $30s/t mark.
Europe-to-Asia has good demand for February space, especially from base oil exporters, but there is just nothing available on scheduled tonnage. Bringing on a small ship can see levels in the $90s/t for 7,000 to 8,000 tons from the Mediterranean, for example. March space can be found, and at this stage rates are still attractive with levels in the $70s and $80s/t being mentioned for cargoes to China. Once the unfulfilled February demand switches to March this space could quickly disappear.
Europe-to-India is strong, again mostly with base oils intermingled with pyrolysis gasoline and vegetable oils. Freights from Rotterdam to the west coast of India are pushing into the $70s/t for 5,000 ton requirements.
Asia
Business within Asia has rapidly got back up to speed, and most ships are looking well employed. Northbound rates for 2,000 ton parcels from Singapore to Yangtze are typically running in the low $50s/t. Southbound has been a bit mediocre, but intra-Far East has produced quite a lot of business. In some cases there are cargoes of paraxylene crisscrossing with cargoes simultaneously going both into and out of China. Aromatics demand in the region looks solid with some of the cargoes getting up into the 5,000 to 10,000 ton range.
Export business seems to be busy. Benzene is being quoted into Europe especially. There are also some speciality cargoes from China to Turkey for instance that pay in the $90s to $100/t for 5,000 to 7,000 ton lots and which have attracted several owners to consider sending more ships on this service in future. Palm oil business is quiet to India, but chemical demand is firm, and there seems to be a lack of space on this route.
India and the Middle East Gulf continue to provide a huge amount of opportunities for ships, and levels are stable to firm. Eastbound numbers are stronger, and we have seen 15,000 ton cargoes of easy chemicals from the Middle East Gulf to China pay in the low $60s/t for instance. Westbound to Europe remains unpopular due to heightened piracy and poorer prospects from Europe afterwards.
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.