Europe fared a little better over the past week. Asian markets also continue to see new growth, while the U.S. remains the main hotspot of activity.
U.S. Gulf
The year-end momentum continues to build out of the U.S. Gulf. U.S. Gulf-to-Far East has been very busy, with styrene being one of the main products in demand. Aromatics, glycols, ethylene dichloride and base oils have also been competing for vessel space.
Vessel space is very scarce for November, and rates are firm and seem to be moving even higher. Currently, 5,000 tons of base oils were booked from the U.S. Gulf to Singapore at $82 per ton, which sounds reasonable, but only because it was fixed as a package with 10,000 tons of paraxylene on the same ship.
Large lots of base oils have also been moving from the U.S. Gulf to west coast India, actually for similar rates but on basis 13,000-14,000 ton sizes, and loading in Houston, Lake Charles and Port Arthur. November space is tight from U.S. Gulf to India-Middle East Gulf.
Base oils are on the menu for ships going southbound into east coast South America from the U.S. Gulf, along with parcels of caustic and clean petroleum. Rates are steady at the moment but are expected to firm as the first cargo of ethanol has been booked into Brazil, with further shipments expected by the end of November to early December.
Base oils are actively looking for vessel space into West Africa as well as into the Caribbean and west coast Central America. Finding tonnage on routes going through to the west coast is tricky and rates would be around $90-100/t for 4,000 tons of base oils currently. Transatlantic eastbound saw another round of styrene interest with at least one cargo of 5,000 tons fixed from Lake Charles in the mid $60s/t. A couple of ethanol cargoes were detected as well as some smaller lots of used cooking oil, lysine and vinyl acetate monomer.
Europe
There has been a steady level of chemicals demand in the North Sea and Baltic which has been keeping most of the fleet busy. Bad weather has contributed to the situation, costing many ships a day or two of delay. Consequently, there are not that many ships open for some of the prompter requirements.
Southbound into the Mediterranean has been a bit more active with the earliest open positions now virtually all covered. Rates are stable but remain on the low side when compared to the levels of a month or two back. Some base oils have been noted but are mainly system movements and not a result of spot sales. Northbound has been a bit busier than normal as well, with cargoes of pyrolysis gasoline, methanol, aromatics, ETBE, molasses and gasoline components, but still not busy enough to fill all the ships on berth which means that rates remain lean.
Inter-Mediterranean business took a turn for the better which is reflected in the fewer prompt open positions, especially in the west Mediterranean. In several instances, charterers had to settle for loading on slightly later dates than originally planned. Rates remain competitive on the whole and there will have to be at least another week of solid fixing if there is to be any noticeable increase in rates, which does not seem to be on the cards so far. Some base oil demand has cropped up in the Mediterranean, with a couple of ships fixed into Turkey.
Transatlantic westbound volumes have not been disappointing because there have been a variety of cargo requirements ranging from benzene to biodiesel, paraxylene, caustic, drilling fluid, urea ammonia nitrate, sulphuric acid, hydrotreated vegetable oil and magnesium chloride. However, there have also been a wide range of ships available and able to load promptly. Rates therefore remain depressed.
Europe-to-Far East has picked up quickly and the last remaining prompt ships have been filling out with rates in the mid $80s/t basis 5,000 ton cargoes, but the ships that are coming later in the month are now talking of mid $90s and in some cases over $100/t.
Rotterdam to India-Middle East Gulf is fairly tight on scheduled space, and rates are being pushed up, although there are a couple of Mediterranean positions that still have to fill and which may offer reasonable rates. All the same, 20,000 tons of phosphoric acid from Morocco to west coast India reportedly fixed at $50/t, which is a considerable jump over the usual rates paid. Another vessel took 2,500 tons of easy chemicals from west Mediterranean to west coast India at around $115/t, which is about $15/t higher than the previous two fixtures. Some base oils have been quoted but are believed to be half-hearted attempts only.
Asia
Chemicals activity continues to expand within the domestic Asia market and the smaller fleet is looking more comfortable. China has opened up to imports of benzene, toluene, paraxylene, orthoxylene, glycols, phenol and acetone. The base oil list of enquiries in the region is also quite prolific, especially out of Korea. Rates are steady at the moment but may firm if demand gains momentum.
Palm oil demand has been mixed. The Diwali holiday in India has caused demand into the Indian Ocean to slide, although Chinese demand is maintained. Deep-Sea palm oil demand is satisfactory too, but because of falling demand in India there could be an imbalance of ships in the 8-15,000 dwt category open in the Malacca Straits looking for alternatives which might then impact the chemicals trade.
Asia export business is steady with products such as sulphuric acid, phosphoric acid, solvents, biodiesel, hydrotreated vegetable oil and vinasses noted but whether it is enough to provide employment for the ships that would normally trade into India-Middle East Gulf has yet to be seen. Both westbound and eastbound routes out of the India-Middle East Gulf region are faring well with good levels of demand and we have seen cargoes of methanol, ethylene dichloride, caustic, MTBE, aromatics base oils, acids, glycols, styrene, pyrolysis gasoline, canola oil, ethanol, acetates and linear alkyl benzene quoted. Long delays have built up at certain jetties in India and ships can be held up by at least a week to 10 days queuing for a berth.
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.
