U.S. Gulf to India-Middle East Gulf is another route with good demand but a shortage of space. A couple of large cargoes of base oils and ethylene dichloride to India are creating the interest, and it will be interesting to see the levels that are eventually agreed, if indeed they do get fixed.

Transatlantic eastbound is strong too. Styrene, pyrolysis gasoline and ethanol are the main products on show, and rates are touching mid $50s/t for 5,000 ton parcels out of Houston.

U.S. Gulf-to-Caribbean is firm with a number of small chemicals, vegetable oil and tallow parcels, as well as a couple of base oil opportunities into Rio Haina, Mexico and Colombia.

U.S. Gulf-to-east coast South America is perhaps the one major route that has not experienced a rise in rates, and numbers are still in the $70-$72/t region for 5,000 ton parcels to northern Brazil.

Europe
There has been no respite from the grim market for owners whose vessels are plying the waters in the North Sea and Baltic. Competition among owners for cargoes has certainly heightened, and rates on routine cargoes in the region have fallen.

For example, a typical 4,000 ton parcel from Rotterdam to northern France had been commanding rates of around 60,000 to 65,000, even as recently as August, but the September shipments have all gone at around that figure, but in dollars rather than in euros.

It has been tough to send ships southbound into the Mediterranean as well, and a 3,000 ton parcel from Antwerp-Rotterdam-Amsterdam to Barcelona that would normally fetch mid 30s/t has barely gone above 30/t, just as an example of how rate levels have sunk. Base oils are showing up on the cargo lists to Turkey and the Mediterranean, but in no great volume.

Northbound is not very exciting, and there is easily space obtainable. Inter-Mediterranean routes are stable, possibly assisted by the emergence of vegetable oils from the Black Sea following the harvest. There are nevertheless a lot of ships in the area, and in one case, a cargo of 6,000 tons of base oils was fixed from western Mediterranean to Turkey on a ship that could easily have accommodated another 6,000 tons in addition, all for a rate in the mid 20s/t.

Transatlantic westbound has come under a bit of pressure. There are possible arbitrages for toluene, benzene and paraxylene, but they rarely remain open long enough for deals to complete, and so there has been a string of failed fixtures over the past week. Freight levels are dropping slightly as a result.

Europe-to-Far East is perhaps the strongest of the European routes because most of the scheduled space has already been booked. There are, however, plenty of open ships in the area. While rates may rise slightly, they will not soar ahead like the U.S. rates are doing.

Europe to India-Middle East Gulf is stable for now, but uncertainty over phosphoric acid price negotiations between European sellers and Indian buyers could cast a shadow over this route and then free up a lot of space.

Asia
The trend of quoting cargoes for October lifting has continued in the domestic Asia market, which has left some of the owners with more prompt vessels looking increasingly uncomfortable and struggling to fill their ships. Rates have come down fractionally on the routes between Korea and China and from Singapore northbound to China and Korea, but it is no more than a dollar or so.

Instead, owners are gearing up for a bonanza of palm oil business, and where possible they are readying their ships so that they have suitable last cargoes. Demand has increased dramatically in all directions and will probably have ramifications on the Asia export trade as owners divert their ships into the edible oil trade instead. So far, rates have not shown any sign of strengthening on deep-sea parcels of chemicals and base oils since there is still an overhang of prompt space, but rates into India for example may quickly escalate.

Currently, 4,000 to 5,000 tons of base oils from Singapore to west coast India would expect to see levels in the low-mid $40s/t, but if palm oils follow the trend of previous seasons then these rates could eventually be achieved on 10,000 to 15,000 ton slugs of palm oil, which would then lever base oil rates up well into the $50s/t.

The first rush of palm oils into India should create a surplus of space in the India-Middle East Gulf region which could assist in shipping base oils back to Asia from ports such as Mumbai, Karachi and Sitra at competitive levels. But if last year is anything to go by, owners just simply sent their ships back in ballast to the Malacca Straits to reload more palm oil.

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.