Most of the scheduled ships from the U.S. Gulf to the Far East are full for January, which means that it is the duty of the outsiders to fall into line, and there are signs this process has already started. Such ships are not cheap either, and there are reports of rates from $100 to $130/t being paid for 10,000 ton cargoes, depending upon load/discharge options.

The secret seems to be to fix far ahead. The second half February for example can still yield open space, and these freights are more like $95 to $100/t, but for just 5,000 ton cargoes. The space will go quickly to those who can react quickest. Whatever develops, U.S. Gulf-to-Asia will determine what happens in the other U.S. Gulf trade lanes.

Transatlantic eastbound for instance: There is not a great appetite at the moment, chiefly because of the change in export credits that will mean fewer ethanol cargoes shipped to Europe. Instead, there are various styrene possibilities, the rates for which are around $60/t for 5,000 ton lots and low $70s/t for 3,000 ton quantities. As more tonnage is directed into Asia, so the transatlantic position list will thin, and rates will probably begin to creep upwards.

It is the same from the Gulf to the east coast of South America. Contractual business is steady, but there are a number of ethanol cargoes that, if fixed, will mean charterers will need to hustle for space alongside charterers who need the vessel to go into the Caribbean, or to Asia. U.S. Gulf-to-India is another route that is already tight on space, and rates for 10,000 ton cargoes are already in excess of $100/ton.

Europe
With so many public holidays throughout Europe the first weeks trading was never going to be a busy affair. Not that it was a washout either. A steady stream of cargoes in and out of the Mediterranean was enough to keep most coastal tonnage from becoming idle. In the North Sea, strong winds did their bit to cause delays and subsequent port congestion with most vessels losing a couple of days trading as a result.

Transatlantic westbound has been sedate, with just an occasional cargo of urea ammonia nitrate or sulphuric acid fixed. Freights have rolled over from last year and are around $45/t for 5,000 ton parcels from Rotterdam to Houston.

Demand from Asia is beginning to pick up, and if the pattern of the preceding month is followed then a lot of the opportunistic carriers will get fixed to Asia at high freight levels, leaving the other routes to pick over what vessels are left. Of course, if Asian demand stalls, then there should be opportunities to keep rates down on other routes out of Europe.

Europe-to-India and the Middle East Gulf is presently tight on January space, and freight rates have already lifted a little. A 5,000 ton parcel from Rotterdam to the west coast of India now fetches around $80/t for instance. Vegetable oils, pyrolysis gasoline, aromatics and ethylene dichloride are keeping this tradelane busy, but the mainstay of the route is phosphoric acid, and negotiations between Mediterranean producers and Indian buyers over Q1 prices have just concluded. There had been concerns of a protracted battle over prices but in the end an agreement was reached that will see continued demand for space in this direction.

Asia
The holiday mood has been extended into Asia too with assorted countries having official holidays over the past week. There is also the start of the lunar holidays looming later this month. All in all, it has created a quiet start to the year.

The most active tradelane has been the inter-Far East route with a moderate amount of aromatics being quoted into China and Taiwan. Other regional services have had to rely on contractual volumes to occupy the majority of the fleet.

Palm oil demand is a bit thin to India, China and Europe, but rates seem to be clinging on. The same goes for Asian chemical exports such as sulphuric acid to Chile, where levels in the mid $70s/t have been reported this week for 18,000 ton cargoes. Even small parcels traffic, such as 2,000 ton parcels from China to the Mediterranean are still going for mid $130s/t, but there are many who believe this will change shortly with the arrival of so much tonnage in Asia from Europe and the U.S.

Trade in and around India and the Middle East Gulf has begun to look busier, although there are still a number of vessels that need employment over the next week or so. Methanol, caustic, ethanol, vegetable oil and molasses have been spotted looking to move westbound, and even some base oils demand has tentatively been noted. Eastbound sees methanol, MTBE, aromatics and a few base oil opportunities too. At this stage, freights are roughly unchanged from end 2011.

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.