United States markets remain on a firm footing with tight tonnage supply and steady demand. European domestic business is satisfactory, but deep-sea volumes are thin. Asian markets have been a little more active this week.
U.S. Gulf of Mexico
Owners are playing hardball on the U.S. Gulf to the Caribbeanroute. There are plenty of cargoes out there, yet only a few open positions. This time owners seem determined to make the rate increases stick. There are 5,000 ton parcels from Houston to the East Coast of Mexico that are currently fetching $26 to 27 per metric ton. The U.S. Gulf to the East Coast of South America is proving to be equally as tight. Scheduled space is now booked well forward until almost the end of March. Consequently, rates for the standard 5,000 ton parcels from Houston to Santos have upped to the mid $50s/t.
Europe continues to be one of the more attractive routes for U.S. ethanol sellers, in preference to sending product to Brazil, which means that transatlantic eastbound rates remain firm, having crept into the low $60s/t for 5,000 ton parcels from Houston to Rotterdam. Aromatics, cumene, phenol and acetone are the other grades making their way to Europe.
The U.S. Gulf to the Far East was slow most of last week, causing owners to doubt whether they could maintain the current strength being shown on freight levels. One or two owners began to waiver and mutter about numbers in the $80s/t for 10,000 ton cargoes from Houston to the Mainport Far East, but within the past few days there has been an influx of benzene/toluene/xylene cargoes and owners are again talking back in the $90s/t.
Europe
Demand within Europe continues upbeat with tonnage well employed in the North Sea and Baltic. Ice remains an issue in the Baltic, affecting some base oil shipments. It also is a menace in the Black Sea, although warm temperatures over the past couple of days have seen the thickness melt by 25 percent.
Business within the Mediterranean is brisk. Base oils are moving well into Turkey as customers find alternative supplies to Black Sea material. Rates are firm on the whole, although time to time there can be bargains out of Black Sea ports where there are no ice restrictions and where there are ships with no ice-class that would otherwise have to ballast away empty.
Transatlantic westbound is somewhat dull. However, oil markets have recovered and taken away any surplus space. This means that rates for chemicals and base oils into the U.S. Gulf stay roughly unchanged. Europe to Asia is only seeing a moderate amount of business, such as ethylene dichloride, paraxylene, acrylonitrile and a few small parcels of base oil. Generally, rates have slipped by a dollar or so, but owners are loathe to go down further because bunker prices have all gone over $700/t, even in Rotterdam, making the fuel bill look even more horrific. Rates are unchanged too on the route into India and the Middle East Gulf region.
Asia
Its a bit more encouraging on the domestic Asian market this week. Bits and pieces of prompt space are left, but most ships are running into the first week or two of March. Aromatics continue to move into China, although not in a really big way. There is, however, a fair amount of southbound business into Southeast Asia, with aromatics, styrene, white spirit, base oils, gasoline, caustic and ethylene dichloride. Northbound, there are some decent loads of methanol, MTBE and pyrolysis gasoline, as well as parcels of base oil. There are 3,000 ton parcels from Singapore to Taiwan or South China running at $36 to 38/t, and about $10/t higher into Korea.
Inter-Southeast Asia trades have been busier too, especially with benzene movements into Singapore. Asian export business has not ground to a halt as some feared. Benzene has tiptoed around the Asia to U.S. route, with some parcels getting fixed, albeit not a rush of business either.
Small parcels of chemicals and biodiesel continue to be fixed into Europe at unchanged levels. There is some prompt space open in India and the Middle East Gulf region, most of it is on the lookout for cargoes eastbound in preference to westbound possibilities. Small parcels of base oils, styrene, ethanol, methanol and benzene have been seen looking to ship from India and the Middle East Gulf region to Europe. Rates for 3 to 6,000 ton parcels from the Middle East Gulf into Antwerp-Rotterdam-Amsterdam are being talked about in the mid $70s/t by charterers. Eastbound too sees base oil opportunities from India and the Middle East Gulf, as well as more usual cargoes of ethylene dichloride, methanol, MTBE and aromatics.
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.