U.S. business remains largely sluggish across the majority of trade lanes. Europe also suffered another poor week in terms of cargo demand. Asia, however, looks pretty buoyant, both domestically and on export business.
U.S. Gulf of Mexico
With the exception of Bayonne, N.J., all the terminals and storage facilities along the Eastern seaboard are fully operational again after Hurricane Sandy. The temporary suspension of the Jones Act to allow foreign-flag ships to trade petroleum products along the U.S. coast had little impact on the small tanker fleet, with only the occasional ship fixed. The surplus of small tankers open in the U.S. Gulf, therefore, continues, with several vessels remaining unfixed for the entire week.
Rates are soft for cargoes of 10,000 tons or more in the U.S. Gulf to Caribbean route, but for most base oils and chemical parcels rates are unchanged. The U.S. Gulf to East Coast South America is very slow, and there is space available on nearly all the scheduled sailings. Some small lots of base oil have been quoted U.S. Gulf to East Coast South America, where the rates will probably be in the $90s/t for 2000 to 3,000 ton parcels. For larger lots of easy chemicals, 5,000 ton parcels from Houston to Santos, for example, rates will more likely be around $60/t.
Transatlantic eastbound is slow. Some styrene was attempted, and there have been some small lots of biodiesel. Rates on the latter cargo, which was 2500 tons from the U.S. Atlantic Coast to Northwest Europe, were in the mid-high $70s/t. Again 5,000 ton cargoes from Houston bring the rates down to the $50/t region.
Space on the U.S. Gulf to Far East route is almost full for November, yet perversely, rates are lower for November than for December. It should still be possible to book 5,000 ton cargoes from Houston to scheduled principal ports in the Far East in the mid-high $60s/t for November, whereas owners expect a rush for December and are therefore pricing the same quantities in the $70s and $80s/t.
Europe
There are still a large number of prompt open positions throughout Europe. In the European Domestic coastal areas, a few owners report having fixed all their ships until December, but for those without contractual work the market has been quite brutal, and competition for each and every spot market cargo has ensured that rates remain highly competitive.
Base oil shipments have been sparse, although a string of enquiries has appeared from Turkish buyers looking to buy product out of the Black Sea. Rates for 3,000 ton cargoes of base oil from Antwerp-Rotterdam-Amsterdam to Marmara are $68 to 70/t.
Transatlantic westbound has been a bit more active, yet in spite of this rates for larger cargoes have fallen – 10,000 ton parcels of aromatics from Rotterdam to the U.S. Atlantic Coast, for example, fetched just $34/t. Smaller cargoes from Rotterdam to Houston are more in line with low $40s/t for 5,000 ton quantities. Benzene, pyrolysis gasoline, toluene, caustic, urea ammonia nitrate and sulphuric acid are the main commodities being moved.
Europe to the Far East is not that encouraging. There have been enquiries, certainly, for products such as ethylene dichloride, styrene, paraxylene, ethanol, butanols, acetone, etc., but not many are firm, and the amount of open space is keeping rates in the mid $80s/t for 5,000 ton cargoes from Antwerp-Rotterdam-Amsterdam to scheduled principal ports in the Far East.
Europe to India and Middle East Gulf is starting to experience greater demand for vegetable oils, while phosphoric acid continues to roll into India. Base oils are generally infrequent to destinations east of Suez these days, although 6,000 tons was heard fixed from the Black Sea to Singapore, and traders are looking at small volumes from the Mediterranean to Aqaba and Sudan.
Asia
Business has been rather good in the Domestic Asia market over the past week. Reasonable demand for aromatics and styrene from Chinese buyers has created a firm basis for freights intra-Far East.
Northbound from Southeast Asia is strong, with an array of cargoes quoted, such as benzene, pyrolysis gasoline, styrene, glycols, phenol, MTBE and base oils.
Southbound to Southeast Asia sees mainly caustic, sulphuric acid, paraffins, styrene and solvents. On top of all that, the colder weather is enticing more of the larger vessels to trade in the clean petroleum markets within Northeast Asia. Palm oil trades also are providing good employment opportunities for owners with ships open within Asia, with rates staying at very high levels.
The bubble will burst at some point, but for the moment there have been very solid rates reported -15,000 ton parcels of palm oil from two ports in the Malacca Straits to one port on the West Coast of India reportedly went for about $50/t for December, an increase of $5t over last week.
Asia Export trades are all linked to what is happening in the palm oil market, and no owner will go below those rates. As a reference point 15,000 to 20,000 ton cargoes from the Malacca Straits to the Mediterranean currently command mid $70s/t.
Middle East Gulf Coast to India regions are also busier and space is tighter. Rates are up slightly by $2 to 3/t this week on Eastbound routes, which is a mixture of demand and the desire to have the ships back as quickly as possible to load the next batch of palm oils.
Westbound space is tighter too, although rates have not really changed so far. However, they will probably start to react during the week.
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.