It has been a very dismal week in the Americas and Europe, with very little trade being discussed over the past week. Asia is not exactly buzzing either, but there are signs of some products being moved, especially into China.
U.S. Gulf of Mexico
It has been another deathly quiet week in the U.S. Gulf. The large number of ships open between now and the end of the month is testament to the poor demand being seen in the region these days.
The U.S. Gulf to Caribbean trade is very thin, and there are simply too many ships chasing too few cargoes that some owners are thinking of sending their ships to Europe or South America rather than sit idle in the Gulf.
The U.S. Gulf to East Coast South America is busy with ethanol, most of which are cargoes of 10,000 tons or larger. Should some of these get fixed, there is a very good chance it could bring additional space to this route which will be well received by those charterers who have been locked out because of insufficient vessel space. Some base oils, for example, are being discussed for Houston to Brazil.
Transatlantic eastbound is very slow. A couple of styrene cargoes managed to get fix, along with some used cooking oil. Rates are averaging out at $50 per ton for 5,000 ton batches for Houston to Rotterdam, with outports such as Lake Charles, La., and the Mississippi paying suitable premiums.
The U.S. Gulf to Far East has been virtually invisible with hardly any demand being registered. This is not good news for the handful of ships that still have remaining space in June. There was talk of low $50s/t being obtainable for 10,000 ton space that suddenly became available for the U.S. Gulf to scheduled principal ports in the Far East, although this would be to mitigate for the cancelled cargo, which might help explain the extraordinary low level.
Europe
Spot trade is meagre within the North Sea and Baltic regions, and owners also report contractual volumes are down. The only positives to draw on this week are that the small clean petroleum and biodiesel markets seemed to be a bit busier in this area.
Northwest Europe to the Mediterranean has managed to produce a range of new requirements, such as methanol, acrylonitrile and pyrolysis gasoline, but base oils have been restricted to just a few parcels.
Northbound from the Mediterranean is looking stale, and there are plenty of open ships which means it is not difficult to cover the majority of enquiries.
Inter-Mediterranean remains flat, and owners are consciously seeking ways to send ships out of the area. Apart from producer business, base oils have been sporadic within the Mediterranean now that Turkish demand has subsided.
Transatlantic westbound, whilst not busy has however produced a rash of fixtures, including caustic, pyrolysis gasoline, urea ammonia nitrate, reformate, naphtha and even some base oils, though the latter more for Mexico and the Caribbean. Rates tend to be weak, given the amount of available space, and 5,000 ton parcels for Rotterdam to Houston are pegged in the $43 to 45/t zone.
Europe to the Far East is slack, and consequently there is quite a lot of open space this month. Rates are notional due to the lack of visible business being booked. From Rotterdam to scheduled principal ports in the Far East, 5,000 ton volumes would probably fetch around $80/t basis.
Northwest Europe to India to the Middle East Gulf has seen a mix of cargo possibilities, including a number of base oil enquiries, both to India and to the Middle East Gulf. Rates tend to be unchanged, which effectively means in the low-mid $70s/t for 5,000 ton cargoes for Rotterdam to the West Coast of India.
Asia
Trade within the Domestic Asian market has been augmented by a number of paraxylene, toluene, mixed xylenes and benzene cargoes into China and Taiwan, mostly originating from Korea. Some of these requirements have stipulated June loading, which will be a boon to the owners who do have prompt space.
A number of caustic cargoes have been seen coming back out of China to Korea and South East Asia while pyrolysis gasoline has again been detected looking to ship from South East Asia back to China. These modest volumes may not be enough to adjust freight levels, but they will assist the rotation of tonnage within the region.
Export demand has produced some interesting possibilities, including mixed xylenes and benzene to the U.S. Gulf as well as several sulphuric acid shipments to Chile. Base oils have been represented with cargoes moving to Antwerp, Rotterdam, Amsterdam, India, UAE and the Americas.
Owners are maintaining firm freight ideas on routes to North West Europe, and 5,000 ton parcels of easy chemicals from Ulsan, South Korea to Rotterdam are placed in the mid $90s/t, while more specialist cargoes may see numbers $10 to 15/t above that.
Palm oil demand has been satisfactory on the long-haul routes to Europe, Africa and the United States, but has been reduced to India and Pakistan.
The market in the Middle East Gulf to India region has been sluggish westbound, but reasonably active eastbound.
As tends to happen, the market is adapting to the stricter regulations concerning Iranian shipments and owners who can trade with Iran are sending ships into the area in the expectation of bonanza freight rates. One of the major issues will be protection and indemnity insurance coverage for the ships from July 1, since no European Union insurer will be permitted to offer cover, but owners do not seem fazed at this stage.
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.