European markets continue to disappoint due to the lack of activity. U.S. volumes have improved slightly, but not enough to alter rates. Asia remains busy through the rest of January.
U.S. Gulf of Mexico
There were a number of large cargoes of aromatics quoted from the Gulf to the Far East over the past week, including 20,000 tons of paraxylene and another 20,000 tons of toluene. However, while demand may appear buoyant, the problem of actually securing enough material is the problem, and at least one attempt to fix these cargoes failed. There have been a bunch of other products that have also been quoted, such as ethanol, styrene, acrylonitrile, phenol and acetone, mostly in smaller sizes, and therefore stand a chance of being fixed.
Rates remain notionally in the mid $70s/t for 5,000 tone parcels from Houston to scheduled principal ports in the Far East.
The Gulf to South Americans east coast is slightly busier, and freight rates continue to creep upwards. There has been interest in shipping ethanol, base oils, caustic, glycols, methanol and clean petroleum, and rates are perhaps now in the region of mid $60s/t for 5,000 ton cargoes from Houston to Santos. There is a longer list of shipping requirements back up from South America, too, including some base oils and wax from Brazil to the Gulf, but the really large cargoes of ethanol are all fixed well ahead, and consequently spot freights are actually weak for the remainder of January.
Transatlantic eastbound has been slow. Even the faint interest to move styrene to Northwest Europe has been deferred until later this week. Numbers have probably not actually changed, however, due to the lack of meaningful fixtures. The Gulf to Mediterranean route though is pretty busy, and most ships are full for January.
The Gulf to Caribbean route has seen a slight increase in the amount of cargo requirements, although much of it is vegetable oil and tallow, with a few parcels of ethanol, methanol, caustic, biodiesel and MTBE mixed in. Rates are generally unchanged.
Europe
It turned out to be another slow week in the North Sea and Baltic, with plenty of open tonnage. Furthermore, there have been a number of fixtures done in which substantially lower freights have been recorded. It is said, for example, that 2,300 base oils from Port Jerome to Uddevalla were fixed at $80,000 to $85,000 when the usual rate tends to be between $110,000 to $120,000, It may be an aberration, but the reaction from most owners is that they would not contest it at such levels, even were they to take other cargoes as a completion.
In the Baltic itself, ice is becoming more of an issue. Some base oil ports such as Kaliningrad are seeing ice thicken on the approaches to the port.
Southbound into the Mediterranean has been busy with cargoes of methanol, aromatics, base oil, caustic, acrylonitrile and biodiesel, but nonetheless there has been an assortment of ships with space across a wide range of dates and so freights are stable.
Northbound has been dull, and space is easy to find. Inter-Mediterranean routes recovered sufficiently to make a reasonable dent in the amount of prompt space, yet it has not been enough to avoid a bunch of ships slipping into spot/prompt positions. Ice is forming in some of the ports in the Black Sea and Crimea, making it harder to locate suitable ice-class tonnage.
Transatlantic westbound has been quieter than the previous week since prices for several common cargoes fell, such as those of benzene and pyrolysis gasoline. Apart from a couple of base oil cargoes moving into the Caribbeans, there has not been a great deal else reported.
Europe to the Far East is showing more life, especially for January loading. Scheduled space, however, has been full for a while and consequently a couple of outsiders have successfully secured base cargoes of ethylene dichloride and are now looking to see what else they can get to fill out with. Traders are looking at styrene, pyrolysis gasoline, orthoxylene, mixed xylenes, glycols, acrylonitrile, phenol, acetone and oxo-alcohols. Freights are mostly in the $90s/t for 5,000 ton cargoes from Rotterdam to scheduled principal ports in the Far East.
Europe to India and the Middle East Gulf show unchanged levels against a slight rise in the amount of spot material to be shipped.
Asia
There have been plenty of cargoes on the Domestic Asia market that need to be shipped in January, but most vessels are already fully booked. As usual, there are numerous parcels of aromatics quoted both intra-Far East and also northbound from Southeast Asia.
Base Oils have had a good showing with cargoes noted on most Asian routes. There have also been attempts to ship Asian base oils on long-haul routes such as into the Middle East as well as the United States and Nigeria.
The supremacy of palm oil in Asia is still felt, although there are fewer new cargoes being quoted, suggesting demand from China and India may have peaked. Eventually, owners may start to look at alternatives, which could cause freights to see some correction. Currently though, there are still fixtures being done in the $40s/t to India for large lots from the Malacca Straits. Base oils from, say, Korea to the west coast of India will fetch rates in the $60s and $70s/t for smaller parcels of 3,000 to 5,000 tons.
The Middle East Gulf region to India market is busy enough that owners are able to avoid having prompt open positions. Rates are fairly firm as well, both east and westbound. Regional trades are tight on space and rates of $50-60/t are mentioned on 3,000 ton parcels from the west coast of India to the Middle East Gulf, for example.
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.