U.S. markets are relatively stable, but European markets are slow and rates are soft. Even the markets in Asia are quieter than they were back in March.
U.S. Gulf of Mexico
The number of spot cargo requirements has been pretty low in the U.S. sector, while the emphasis has been mostly on contractual volumes. The neatly balanced situation between demand and supply has caused rates to remain static across the entire region.
The route from the U.S. Gulf to the east coast of South America, for example, is quite tight on remaining April space, primarily because of strong contractual requirements, and owners are able to fill out on small parcels of caustic, solvents and clean petroleum, thereby keeping rates flat.
Transatlantic eastbound is the same. Almost all the major carriers confirm their ships are just about full until May. Demand is pretty low-key, however, since the arbitrage for products such as styrene and ethanol is closed. Spot demand instead sees a few parcels of glycol, used cooking oil, phenol and solvents such as nonene, none of which will really challenge current freight levels.
U.S. Gulf-to-Caribbean is calm while U.S Gulf-to-Far East has still to pick up after the American Fuel and Petrochemical Manufacturers conference in San Antonio. Traders have looked at styrene on this route but nothing much has been booked. Ethanol is being talked about as well, but it seems to be subject to a tender award. April space, however, is readily available from the scheduled players which may bring pressure to bear on rates unless there is an upswing in demand.
Business has been very slow in the North Sea and Baltic and even contractual demand has been disappointing. The southbound market into the Mediterranean has however been a bit more buoyant. There have been a number of base oil opportunities, mostly into Turkey but also a few additional base oil cargoes which are part of the routine in-house inventory replenishment programs of the major producers, but which are always welcomed by ship owners.
Rates are a bit firmer on certain requirements – 4,000 ton cargoes of easy chemicals from Antwerp-Rotterdam-Amsterdam to Portugal attracted offers of 30/t and upward for instance, but at the other end of the scale, 1,500 tons of easy chemicals going from Poland to Marmara were fixed in the $90s/t.
Northbound looks stable with some decent-sized cargoes of pyrolysis gasoline, biodiesel, ETBE, and methanol filling much of the space.
Inter-Mediterranean business has been dispiriting, however, and there are quite a lot of ships that are open promptly or within the next seven days. And this is in spite of the bad weather that has affected the region for the past ten days. Bad weather has a habit of delaying ships and thereby causing the space situation to tighten. All the same, rates have been found to be weaker on several occasions.
Transatlantic westbound is a bit slow and there is still an array of both scheduled and semi-scheduled ships with part-cargo space available for April. However, with so little being fixed, the most recent deals were for 5,000 tons of biodiesel from Antwerp-Rotterdam-Amsterdam to the U.S. Gulf in the high $40s/t which rather sets the tone for this route. There is some interest in paraxylene, pyrolysis gasoline, and urea ammonia nitrate, but not in any great quantity.
Not much is happening on the Europe-to-Asia route, and nothing of any great size has been booked that can be used as a benchmark for the rates. A couple of 2,000 ton parcels have been booked from Antwerp-Rotterdam-Amsterdam to Yangtze at around $115-$120/t, and 4,000 tons of phenol has been done from Antwerp to Caojing at $110/t.
3,000 tons of normal paraffins from Algeciras to Yangtze fetched $100/t. Some special grades of base oils were booked from Antwerp-Rotterdam-Amsterdam to China and the cargo of base oils from Black Sea to Singapore was finally covered, but none of the other requirements has materialized so far. Some base oils have been quoted on the Mediterranean-to-India route and there has been some talk of base oils from the Black Sea to the United Arab Emirates, but nothing significant otherwise.
The slowdown on the domestic Asia markets has continued this week, and there are more ships signalling that they have part-cargo space available still within April. A month ago, charterers had to work vessel space at least a month in advance. Now, they have the luxury of space even within a week to ten days.
Rates have been trimmed on some inter-Far East routes, although routes out of Singapore are said to be tight and so levels have risen slightly.
3,000 ton parcels from Singapore to Thailand, for example, now fetch low-mid $30s/t, while the same cargo into South China commands mid-high $40s/t.
Asia export trades are primarily focused on smaller parcels of solvents, the rates for which are in the $135-$145/t region for 1500-2,000 ton parcels from China to the Mediterranean. Larger volumes are mainly biodiesel, caustic and palm oil. Levels for palm oil are steady on the routes back to the U.S., Mediterranean, and Northwest Europe.
There is not a lot of space remaining on the westbound service from the Middle East Gulf to India region. Caustic, styrene, base oils, used cooking oil, butanediol and glycols have all been seen, as well as ethanol, castor oil and ethyl acetate from India and Pakistan. Eastbound, however, appears to be a bit quieter, with only the occasional cargo of methanol, MTBE, benzene, linear alkyl benzene and ethanol quoted.