The U.S. Gulf is a bit busier compared to recent weeks. European demand is at about the same pace, while the Asia market is rather subdued.
There has been a gentle increase in the amount of business being discussed out of the U.S. Gulf over the past week. It goes hand-in-hand with a depletion of the amount of prompt space open in the area. This could change as we enter July, as we already see four or five ships coming into the U.S. Gulf in the first half of July that have yet to figure out which direction to take.
Europe to Far East gives the impression of quietness, perhaps because there are not many sizeable chunks out there needing to be shipped. All the same, ships are filling fairly well, and the small parcels of chemicals, such as nonene, butanol, paraffins and acetone pay sufficiently high freights that owners are not so anxious.
For example, a 4,000 ton cargo of acetone from Rotterdam to China paid low $100s/t.
Europe to India-Middle East Gulf is considered to be fairly strong too, with good levels of demand. A cargo of 7,000 tons of aromatics from Leixes, Portugal, to the west coast of India paid well into the $70s/t, as an example, and owners cite numbers in the $90s/t for 4,000-5,000 ton parcels of base oil from Europe to west coast of India.
The past two weeks has seen the domestic Asia market struggle to absorb the amount of open tonnage that has been quoted throughout the second half of June. Somehow, owners have managed to claw themselves back into the fray, and going into July, the supply of tonnage is looking more balanced.
However, it could take just a few days of inactivity to reverse the situation, and right now, there is not that much that is being quoted for early July shipment, in which case gaps could open up quite quickly.
Base oil rates still command a premium over petrochemicals however. Parcels of 3,000 tons of base oil Singapore to Tianjin, China, for example could expect to see levels in the mid $50s/t basis no-heat, and high $50s/t if high heat is needed.
Base oil demand is heavily focused on China, but equally there are cargoes intra-Southeast Asia and some material is making its way into India-Middle East Gulf.
Asia export demand is fairly robust, and aromatics, biodiesel and sulphuric acid have all been noted. What have subsided slightly are the palm oil freights, especially the really large cargoes into the Mediterranean and Northwest Europe. Indian palm oil demand is steady, but unexciting too.
The India-Middle East Gulf region is not as bad as some observers make out.
Westbound is certainly well-balanced. A couple of ships do have prompt space, but they have either been cancelled on existing fixtures or do not hold the correct approvals to take some of the cargoes on offer, such as styrene, glycols, methanol and ethyl acetate.
Base oils are not really in contention on this leg at the moment.
Eastbound is a bit flat, and there are a number of ships bound for India with palm oil that are hoping to capitalize on any base oils heading east. There are some base oils coming out of ports such as Karachi, Pakistan; Sitra, Bahrain; and Hamriyah,United Arab Emirates, but volumes are small and favor part-cargo space.
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 firstname.lastname@example.org or by phone at +44 1207-507507. In the London office SSYs Jordi Maymi can be reached at email@example.com or +44 20 7977 7560.