It is still the case that there are prompt open ships in the U.S. Gulf, but it is also a fact that there are alterative escape routes, which means that rates do not really remain under sustained pressure for long.

Transatlantic eastbound has certainly recorded reductions of around $5 per ton compared to the previous week. The reason seems to be a mixture of open space on scheduled carriers, i.e., contract volumes are not as robust and furthermore there has been a reduction in the amount of ethanol quoted. Styrene and mixed xylenes have compensated to an extent, but as these volumes tend to be in the 5,000 ton lot size it takes longer to fill the space. From Houston to Antwerp, 5,000 ton lots of styrene were fixed at $55 per ton, which has now become the new benchmark figure.

U.S. Gulf to Mediterranean, however, has seen a lot of enquiry, including mixed xylenes, paraxylene, acrylonitrile, styrene, vegetable oils, tallow and base oils. One owner has added two extra sailings to his schedule in order to accommodate the additional demand. Rates are strong – 12,000 tons of paraxylene from two U.S. Gulf ports to Spain and Portugal fetched in the mid $80s per ton, for example, while 5,000 tons of base oils from two U.S. Gulf ports to Italy paid around $110 per ton.

U.S. Gulf to the Far East is rather flat, but rates are unchanged, thanks to residual contract demand. The market into India is pretty steady, too. It is said there are plenty of small parcels of 1,500 tons of base oils from the U.S. Gulf to the West Coast of India that are attracting offers of $115 to120 per ton.

The U.S. Gulf to Brazil, too, is unaltered, although back up out of Brazil is quieter because of a paucity of ethanol and vegetable oils, and here there may be a chance to pick up some base oils from Brazil into the U.S. Gulf or Mediterranean, for example. The U.S. Gulf to the Caribbean remains solid. For instance, 3,500 ton lots of base oils from Houston to Guayaquil, Ecuador, saw levels around $85 per ton.

Europe
The Mediterranean has been more active over the course of the past week and the amount of open space has dwindled. Rates are still firm in the area due to stronger demand. Base oils continue to ship into Turkey but supply constraints mean there are fewer possibilities locally.

Southbound from Northwest Europe into the Mediterranean is another route that displays firm tendencies at the moment.

Northbound, however, is not as strong, and even the routes within the North and Baltic seas are a bit more subdued this week. Deep-sea markets out of Europe are thin, especially into Asia. Main grades appear to be phenol, butanol, paraxylene and the occasional base oil opportunity. Owners are able to hold onto the present rate structure, which is $85 to $90 per ton for 5,000 ton parcels moving from Rotterdam to scheduled principal ports in the Far East.

Some charterers argue that bunker prices have dropped by around $50 per ton, which in their view should equate to a reduction in freights, although owners will readily testify that the existing rates have been insufficient to cover all the other expenses, bunkers included.

Routes from Europe to India to the Middle East Gulf remain firm, mainly because of strong vegetable oil demand, coupled with the occasional pygas, ethylene dichloride and base oil cargo. Rates for 10,000 ton lots from the Black Sea to Middle East Gulf destinations are in the upper $60s for vegetable oils, the upper $70s per ton for chemicals and a touch more for base oils.

Transatlantic westbound has benefited from the contributions made by pyrolysis gasoline and benzene traders. These cargoes and the occasional caustic fixture have ensured rates remain in the mid $40s per ton for 5,000 ton lots from Rotterdam to the U.S. Atlantic Coast, and a few dollars more for U.S. Gulf discharge.

Asia
In the domestic Asian market, this week has seen the return of a few more aromatics cargoes into China, namely toluene, paraxylene, mixed xylenes and a small amount of styrene. These are the grades that have been absent for several weeks, but it is still too early to see if they will have much of an impact on freight rates.

Furthermore, the actual quantities are still not that huge so that the open tonnage in the area is adequate so far to cope with the demand. Some base oil activity has been detected within the region, with regular shipments from Korea southbound and base oils back north again from Sri Racha, which are also more or less regular these days.

Base oils, however, do figure on the Asian exportmarket with a number of fixtures concluded to the United States and several more booked into Europe. Rates on the long-haul trade have not really changed a great deal. Rates in the $90s per ton seem to be the level reported on base oil fixtures from Northeast Asia, whether to Europe or the United States, while numbers are a bit steeper from Southeast Asia into the U.S. Gulf. The market from India and Middle East Gulf is noted to be strengthening, too, in all directions.

Westbound has seen a $3 to $4 per ton jump in freight levels through a mixture of better demand and fewer available ships. Base oils continue to be seen from Iran to Turkey; indeed any product out of Iran is now seeing higher freights. In one instance, an owner claims to have secured a rate of 80 per ton for 10,000 tons of methanol from Iran to Turkey, which is substantially higher than any corresponding freight out of any other Middle East state.

Eastbound, too, is a bit firmer. Increased volumes of aromatics, methanol, methyl tertiarybutyl ether (MTBE) and glycols are mostly responsible.