U.S. Gulf of Mexico
In some ways it has been a quiet week out of the United States. However, as anyone who has a prompt cargo to ship can testify, owners continue to be very bullish on the small bits of space remaining this month.
Looking into March, however, should bring some relief as there is quite a lot of tonnage looming yet there is not that much demand so far. The transatlantic ethanol, biodiesel and aromatics trade to Europe is much slower this week and rates could tumble from the low $60s per metric ton we have become accustomed to for 5,000 ton cargoes from the U.S. Gulf to Antwerp-Rotterdam-Amsterdam.
There are a couple of ships with space from the U.S. Gulf to the Caribbean in early March, although some scheduled carriers claim to be full until much later in the month.
U.S. Gulf to east coast South America is one of those routes without much spare space for the rest of February. Freights for 5,000 ton cargoes from Houston to Santos have been hovering around the mid $60s/t for a while now, although we are beginning to see a slight softening of freights for the bigger quantities such as 10,000 to 12,000 tons.
U.S. Gulf to the Far East remains lackluster. A couple of styrene cargoes have been considered, and there are still occasional shipments of phenol, acetone or ethanol. Numbers are hanging in the low $60s/t for 5,000 ton parcels from Houston to Mainport Far East.
Europe
It has been a second week of reduced activity within Europe. It is most noticeable in the Mediterranean, where the list of idle ships has been steadily growing. Rates in the area have been declining too, irrespective of the rising cost of bunker fuel.
The political situation in North Africa has certainly not helped. Tunisia for example is not exporting as much phosphoric acid as before. Nor is it importing any sulphuric acid. The caustic plants in Egypt are reported to be slowly restarting though the situation on the new methanol plant is unclear since many of the foreign nationals were evacuated. And now Libya too has stopped exporting methanol.
The rapid build-up of ice in the Baltic means that voyages take longer, and only ships that are ice-strengthened are able to trade. Even ports lower down in the Baltic and at the entrance, such as Oslofjord, are affected. So far, rates from the base oil ports such as Liepaja, Tallinn and Riga, have not jumped enormously, although another cold week could see tonnage stretched thin.
Transatlantic westbound is fairly quiet. Caustic, pyrolysis gas, naphtha and sulphuric acid have been traded, but not to any great extent. Freights are slipping a little, but are still roughly low $30s/t for 5,000 ton cargoes from Antwerp-Rotterdam-Amsterdam to the U.S. Atlantic coast.
Were it not for interest in moving base oils to China or Singapore, the Europe to Far East route would be poor. Freights for 5,000 ton parcels of chemicals from Antwerp-Rotterdam-Amsterdam to Mainport Far East have dipped into the very high $70s/t. Europe to India-Middle East Gulf has been busy with base oils too, and owners are typically looking for levels in the low to mid $70s/t for 5,000 ton cargoes from Rotterdam to Mumbai.
Asia
There have been a few suggestions that Chinese chemical buyers are about to stop importing. This has occurred in the past, usually in response to soaring product prices and satisfactory stock levels. There is mixed evidence so far.
Many chemical prices are very high, but most are directly linked through feedstocks to crude oil. But equally, there have been many cargoes booked far into March, and with further enquiries pending, typically styrene, aromatics, phenol, acetone and pyrolysis gasoline.
What we have noticed is a growing number of Chinese exports, such as paraxylene, benzene and mixed xylenes, but whether this has to do more with profiteering from higher commodity values, or is a tactic to offload surplus material before a crash, is not yet clear.
So far, freights in the domestic Asian markets are quite firm. Export business is active too. Paraxylene to the U.S. is especially interesting as it has not shipped on this route for about six years, but high U.S. prices encourage traders. Benzene too is busy, with cargoes moving to Europe and the U.S. With plenty of sulphuric acid shipping to the Americas, rates remain firm.
Eastbound is also busy with large volumes of methanol, MTBE, styrene and glycols being moved out of the Middle East Gulf into Asia. Rates for 10,000 ton slugs can range from the low $50s/t to low $60s/t.
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.