None of the three main trading regions, U.S. Gulf of Mexico, Europe and Asia really produced anything of note over the past week, with only minor adjustments to freight rates seen on a couple of services.
U.S. Gulf of Mexico:
The main changes in freight out of the U.S. Gulf are that transatlantic eastbound has come down a few notches, while Gulf to Asia reports a moderate increase.
In the case of transatlantic service, there are around six to seven ships currently on berth with partial cargo space to Northwest Europe and whilst there has been some demand for styrene and ethanol, the enhanced competition among the owners has seen rates for 5,000 ton parcels from Houston to Rotterdam drop into the low to mid $50s per ton. A couple of larger base oil fixtures have been recorded from the Gulf to Northwest Europe, but seem to be term business that has been conducted on a spot basis rather than anything else.
On the U.S. Gulf to Far East route, demand for space has caused freights to move back up, and we now see the majority of owners seeking rates in the mid to high $70s/ton, whether for 5,000 or 10,000 ton parcels to scheduled principal ports in the Far East. One or two owners were slow to react to the additional demand and a few fixtures were seen in the high $60s/ton for 10,000 tons, but it did not take them long to work out what was happening and adjust their levels accordingly. Styrene, phenol, acetone, glycol and aromatics have been the cornerstone of demand into Asia this week.
The U.S. Gulf to India to the Middle East Gulf is fairly quiet, and the main carriers are full for the rest of May. Some small lots of base oils, including bright stock, have been worked into India, along with parcels of acrylonitrile and phenol. The U.S. Gulf to Caribbean route is reported to be calm with no significant changes.
U.S. Gulf to the east coast of South America is tight on space, with some cargoes being sourced out of Europe instead. A couple of small parcels of base oils have been quoted into Brazil and Argentina from the U.S. Gulf.
Europe:
The short working week in Europe due to the May Day holiday in many countries was very apparent in terms of new business quoted.
This was most noticeable on the intermediate Mediterranean routes, where vegetable oil, clean petroleum and chemicals markets all suffered through reduced activity. Ships trading in the North and Baltic seas just about managed to keep freight levels unchanged, and it was the same for southbound routes into the Mediterranean, assisted by steady volumes of biodiesel, benzene, caustic, ETBE and methanol.
Several base oil cargoes continue to be seen moving into Turkey, including material from Northwest Europe and the Black Sea, almost in defiance of reports that Turkish buyers were restricting their purchases.
Northboundto Northwest Europe out of the Mediterranean is a bit slow. Transatlantic westbound is still a long way from being healthy, but there have been attempts to ship cumene, cyclohexane, paraxylene, pyrolysis gasoline and sulphuric acid into the U.S. Gulf. Rates however have not budged either way.
Europe to the Far East is extremely quiet, and there are a number of ships open with space still within May. So far, owners have resisted dropping rates needlessly, but if a firm cargo opportunity were to arise and test their resolve, it would be interesting to see what kind of level would be achieved. Certainly for scheduled ports, there is a good chance that $80/ton could be offered, or possibly even less.
Europe to India and the Middle East Gulf is slow, with many open positions around. Vegetable oil seems to have quieted and there is not much pyrolysis gasoline into the United Arab Emirates either.
Asia:
The end of Golden Week has seen domestic Asian demand increase, and in particular intra-Far East, where more styrene, toluene, benzene and glycol business has been reported.
Southbound sees caustic, acetic acid, isopropanol, vinyl acetate monomer and ethanol, as well as clean petroleum.
Northbound cargo quotations list base oils among cargoes of methanol, MTBE, mixed xylenes and oxo-alcohols.
Intra-Southeast Asia is soft with second half May space available. Freight rates in the region remain on the weak side however.
Asian export markets remain reasonably robust. Several ships have gone on berth to the Mediterranean and Northwest Europe, taking chiefly small parcels of solvents and acids, the rates for which range from $125 to $155/ton. The occasional cargo of sulphuric acid has been spotted, and some traders have been trying to work the arbitrage to send aromatics to either the United States or Europe, but so far without too much success.
Not that many new base oil requirements to Europe have surfaced this week. The palm oil market continues to thrive, with strong demand from China, India and Europe, further boosting Asian chemical export rates. India and the Middle East Gulf region see a growing number of owners interested in non-Iranian business, which is making such cargoes more competitive in terms of rate, whilst at the same time making Iranian business even more expensive. Several Iranian chemical plants have effectively been mothballed because of the inability to export.
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.