Freight rates have deteriorated on most European routes. Asia is almost balanced, while the U.S. has registered both increases and decreases, depending on trade lane.
U.S. Gulf of Mexico
Slight increases in freight have been reported on U.S. Gulf to Caribbean routes and from the U.S. Gulf to the east coast of South America in response to an improvement in demand. It has also become apparent that the pool of open vessels in the U.S. Gulf has diminished, and there are fewer vessels able to slip onto these routes over the next couple of weeks.
Base oils have been reasonably active into Brazil, for example, with several parcels fixed. Otherwise, it is the usual mixture of caustic, paraxylene, MTBE and easy chemicals that have accounted for many of the ships already on berth.
Transatlantic eastbound has been bumbling along for several weeks without much direction. Space has been steadily building up, so that when a sudden surge of benzene occurred, rates didnt increase, but actually decreased. A 5,000 ton parcel from the U.S. Gulf to Antwerp-Rotterdam-Amsterdam was accredited at mid $40s/t, while 12,000 tons was said to have been booked in the high $30s/t. However, just as swiftly as the arbitrage opened, it closed again.
Meanwhile, on the U.S. Gulf to Far East route, there have not been many cargoes for owners to chase, which is a bit disconcerting for those vessels that still have prompt space. May looks as though contractual demand will be soft, leaving plenty of ships needing to fix additional parcels in order to fill. When parcels of aromatics have been quoted, rates have been offered anywhere from high $60s/t to mid $70s/t, basis 5,000 tons from Houston to Mainport Far East.
Several ships are on berth from the U.S. Gulf to India-Middle East Gulf, yet still have prompt space available, while the outlook ahead for May sees yet more ships able to offer space if required.
Europe
The chemicals market in the North Sea has been lifted by the appearance of more routine cargoes for shipment prior to the end of April. The Baltic is also performing reasonably well, although there is probably sufficient open space to cater for the majority of requirements.
Southbound is fairly active into the Mediterranean. Biodiesel is of major importance on this route, while styrene acrylonitrile, paraxylene, benzene, ethanol, methanol and a few assorted parcels of base oil have also taken their share of vessel space over the past week. Suitable space has been tight and for at least one cargo of base oil, it has been necessary to ballast a vessel up from the Mediterranean to Northwest Europe to load a cargo back into the Mediterranean.
Northbound can best be described as steady. There have been some decent parcels that have helped fill out the ships on berth, such as pyrolysis gasoline, phosphoric acid, ethylene dichloride, ETBE, caustic, fatty acid methyl ester and vegetable oils, and rates are stable.
Inter-Mediterranean markets have been slow and there is ample space within the region.
Transatlantic westbound is overbooked and rates have fallen. At the end of the previous week, a couple of 8,000 ton pyrolysis gasoline cargoes from Antwerp-Rotterdam-Amsterdam to U.S. Gulf were fixed in the high $30s/t, but this week a charterer is aiming for that kind of money for a cargo of 11,000 tons of paraxylene from Antwerp-Rotterdam-Amsterdam to Wilmington and Houston.
Various base oil tenders into the Caribbean have inspired a succession of cargo quotes from Europe, while several more shipments of base oil have been booked into West Africa.
There is actually quite a long list of cargoes on the Europe to Far East route, but evidently not many can be firm since there is still available vessel space in May and owners freight ideas have dipped slightly. From Antwerp-Rotterdam-Amsterdam to China, 2,000 ton to 3,000 ton parcels are attracting offers in the region of $115 – $117/t, for example. Space can also be found on the Europe to India-Middle East Gulf route in May, with 5,000 ton parcels talked in the mid $70s/t.
Asia
Despite lengthy public holidays about to commence in China, the week has not been totally inactive. It has not been firing on all cylinders, either, and there are plenty of gaps on ships that are open within the next 10-14 days on the domestic Asia market.
In some cases, rates have slipped slightly, although looking further ahead, there is already quite a long list of forward requirements quoted that should mean that May ends up being reasonably balanced between supply and demand of vessel space.
Asia Export markets have been a little more exciting. Methanol has surprisingly been fixed from China into the U.S., and there are more methanol enquiries in this direction, as well as to South America and Southeast Asia.
Caustic, too, is looking to ship to similar destinations, and the high benzene price in Europe has spawned a few enquiries out of Korea. Palmoil and biodiesels have maintained a steady flow, including shipments into the U.S. Gulf and west coast of the U.S. Base oils have been represented by the quote of a couple of COAs of base oils from Korea to the U.S., Europe, India and the Middle East Gulf, totaling between 850,000 tons and just over 1 million tons, to be shipped annually from July.
The India-Middle East Gulf markets are reasonably busy, and both westbound and eastbound are seeing enquiries for larger volumes, especially of methanol, MTBE and aromatics. Rates are mostly stable for now.
Adrian Brown is senior market analyst for chemicals and base oils with SSY Shipbrokers, London. Information about SSY can be found atwww.ssyonline.com. Adrian Brown, in the U.K., can be reached atfix@ssychems.comor by phone at +44 1207-507507. In the London office SSYs Jordi Maymi can be reached atfix@ssychems.comor +44 20 7977 7560.