There are certainly fixtures having being done this week at under $70/t for 5,000 ton cargoes from Houston to scheduled principal ports in the Far East, although as the market tightens on space as we go through May, these levels may prove to be the rock bottom. Having said that, many Asian commodity prices are lower than those in the United States, and with high stocks reported in-tank in China, it may be some time before demand resurfaces.

The U.S. Gulf to Caribbeanrun is a bit quiet right now, and freights in the region can be pretty competitive.

The U.S. Gulf to the east coast of South America is still tight on open space, keeping freights stable in this direction. Contractual partners are maximising the volumes permitted under contract, which means there is not much cargo to utilise as a base in case any other owner were thinking of sending a ship south. This situation is expected to last for the next month and a half.

Transatlantic eastbound has not been very active, but the amount of tonnage already scheduled on berth has thinned, so freights are essentially unchanged for now. Styrene is one of the main commodities this week, with just a small amount of ethanol worked.

Europe:
It has been a disappointing week for those fleets trading within Europe. Demand is a lot less than it was a month ago, and the number of prompt open ships is steadily growing. Freights on some of the intra-European routes have come down a bit. Inter-Mediterranean, for example, is beginning to see greater competition among owners for certain cargoes, which ultimately results in slightly lower levels being fixed.

There are more prompt ships open in the North and Baltic sea routes, too, where the clean petroleum market has melted away and chemicals demand has not improved.

Transatlantic westbound is just too inconsistent to be called busy. Overall, there are perhaps more spot market quotations than two weeks ago, but there are a lot of ships available, and as avenues of escape away from Europe are closed, such as to Asia, these vessels naturally gravitate to the routes that are still producing enquiries. Rates for 5,000 ton parcels from Rotterdam to Houston are therefore still in the vicinity of $45/t.

Europe to the Far East is in the strange situation of being tight on the remainder of space in May, yet there are hardly any new cargoes quoted in the market. Phenol and paraffins have provided the main excitement.

Very little base oil demand has been seen from Europe over the past couple of days, with most being performed for term customers. For example, there has been some movement into the Middle East Gulf from the Mediterranean, but it is not really trader-driven.

Asia:
Many of the new cargoes now being quoted for shipment within the domestic Asian market are for the end May or even June, which is just too far ahead for many of the smaller ships in the region. It is these vessels that are struggling to fit together a programme of voyages in the short-term, and it is these ships that are the most competitive in terms of freight.

From Ulsan, South Korea, to Singapore, 3,000 ton parcels of easy chemicals are reckoned to be going for $34/t to $36/t presently, while the same 3,000 tons from Singapore back up to Korea would fetch $47/t to $49/t.

Export business from Asia is not doing too badly, helped by cheap product prices. Aromatics, for example, are showing up on the Korea to northwest Europe route, while there are plenty of small parcels of chemicals from China, Korea and Taiwan into the Mediterranean and northwest Europe.
Several larger lots of sulphuric acid to South America assist in fixing the larger ships.

Palm oil demand is not too bad either, and freights have risen slightly in response to stronger demand.

In the Middle East Gulf to India region, as Iranian cargoes become ever more out-of-bounds to the majority of ship owners, there has been a bit of a scramble to locate cargoes that load out of ports in the region other than Iranian ones. In some cases, this has produced weaker freights, but on other occasions, the erstwhile customers of Iranian product have gone out looking for alternative supply sources, and these can be lucrative for ship owners. Methanol and MTBE are among the main grades being recorded, but there are also a lot of orthoxylene, paraxylene, benzene and pyrolysis gasoline possibilities.

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.