Both the United States and European markets endured yet another dreary week, with no sign yet of the usual push for year-end space. Asia, meanwhile, continues to enjoy plenty of new requirements which are causing freights to firm on some routes.
U.S. Gulf of Mexico
The huge overhang of tonnage open in the U.S. Gulf is certainly a thing of the past. The current surplus is more manageable, but that it exists at all gives an impression of the lack of new business being generated, since normally at this time of year, ships should be booked for several weeks ahead, and probably more on the really long deep-sea routes.
The U.S. Gulf to the Caribbean route is perhaps slightly more active, but only because the small clean petroleum market has produced a couple of new orders. The chemicals and base oil side of things is pretty slack.
The U.S. Gulf to East Coast of South America is beginning to see some new ethanol requirements popping up, but there is still open space for November, and owners are happy to send ships in this direction to benefit from a better outbound trade with vegetable oils, the rates for which are climbing. Therefore, southbound freights have not changed much, though they may begin to move up over the next week or two.
Transatlantic eastbound rates have actually slipped slightly to under $50/t for 5,000 ton parcels from Houston to Rotterdam. Only small amounts of ethanol and styrene have been seen this week, with some caustic going into the Mediterranean.
U.S. Gulf to Far East trade is expecting the big push, but so far there have just been desultory cargoes of aromatics and ethylene dichloride. November space is practically all gone, but there are ships around and quite a lot of potential tonnage at this stage that can propose space for December. Owners freight ideas are high, often high $70s/t or low $80s/t for 5,000 tone parcels from Houston to scheduled principal ports of the Far East. We shall have to wait and see if such optimism is justified.
Europe
Trade in the North Sea and Baltic, while still considered unseasonably slow has actually been slightly busier compared to the previous week. A timely batch of new biodiesel and ethanol cargoes has helped some of the more prompt positions. Rates are still highly competitive however.
Southbound has also benefited from a greater number of biodiesel possibilities, and rates have stabilised.
Northbound is much the same as ever, with no great movement of any kind.
Inter-Mediterranean traffic is slow for the time of year, and rates tend to be soft. There are, however, a greater number of base oil opportunities being quoted into Turkey again, which is encouraging. Methanol, fatty acid methyl ester and aromatics have been seen in greater volumes this week too.
Transatlantic westbound could conceivably be worse. There is at least the occasional pyrolysis gasoline, benzene and caustic cargo on which to follow up, but the pace is slower than it should be. Numbers are holding, but only just.
Europe to the Far East is not especially busy, and there are some December ships with space. Styrene, ethylene dichloride, paraxylene, butanols and acetone have been quoted, and rates are hovering around mid $80s/t for 4,000 to 5,000 ton lots from Rotterdam to China. Traders are taking a look at base oils again from the Black Sea to India to the Middle East Gulf region after an absence of a month or two. Vegetable oil demand is strong however, with 12,000 ton cargoes from the Black Sea to Middle East Gulf being fixed in the $80s/t as guidance.
Asia
It has been another reasonably busy week in the Domestic Asia markets. Intra-Far East has plenty of benzene/toluene/xylene, styrene and glycols to keep the local fleet occupied, and rates are generally firm.
Northbound also has been active, with cargoes of base oils, MTBE, paraxylene, ethylene dichloride, styrene, orthoxylene and benzene quoted.
Southbound service is perhaps just a bit slower in comparison, as is the intra-Far East market. Rates are generally holding in these two areas.
Asia Export is busy, with traders anxious to find November ships able to load benzene. In one case, traders are looking at shipping as much as 30,000 tons of benzene in one go from Korea to the U.S. Gulf of Mexico.
Palm oil demand has been exemplary, however, and many ships have found themselves lifting palm oil cargoes instead of chems or base oils. The Middle East Gulf-India region is reported to be experiencing an increase in trade while at the same time tonnage remains scarce.
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.