U.S. markets have not changed much this week, while European markets look much the same as last week too. In that respect, Asia is also unchanged, but at least there is still a lot of activity out East.
U.S. Gulf of Mexico
Almost all the freight levels out of the U.S. Gulf are exactly the same as they were a week ago. U.S. Gulf-to-Far East is starting to see some large requirements for February, such as 20,000 tons of paraxylene to China, but nothing has been booked so far to indicate whether numbers are up or down, or just simply sliding sideways.
Transatlantic eastbound has seen some styrene and ethanol fixtures, and whilst space availability is tighter, the levels concluded so far replicate earlier fixtures.
U.S. Gulf-to-Caribbean has been a bit quieter on the chemicals and base oils front. One of the regular owners has still to fix a base cargo into Venezuela but is well-suited to some of the larger parcels of styrene and caustic that have been recently quoted, in which case the ship may be able to offer out some space en route.
There is not much prompt space remaining from the U.S. Gulf to the east coast of South America, but partly this is because the routes back out of South America afterwards are not that lucrative right now and so hold little appeal for owners to place ships down there.
U.S. Gulf-to-India and the Middle East Gulf is considered a touch tighter, and rates for typical 5,000 ton parcels from Houston to Mumbai have risen, though are still under $90/t.
Europe
Owners have adopted a harder stance in the North Sea arena this week and are unwilling at this stage to contemplate further rate decreases, or even to copy the levels done last week. Prompt space is tighter, but such is the nature of this market that the picture changes again after just a few days.
The Baltic however is certainly tighter, and owners are pushing for moderate freight increases – 1,000 ton parcels for instance from the Gulf of Finland to Rotterdam are now priced at over 40/t for February compared to the upper 30s/t from last week. This is mainly due to the ice season, and only ships with Ice-class 1A or 1B can realistically trade here. However, rates for larger parcels are not affected that much, and 5,000 ton cargoes for instance still command around 25/t.
Southbound into the Mediterranean is steady, and there are sufficient ships around able to accommodate all the cargoes quoted without any reason to increase freight levels. Northbound has not altered either, and rates are stable. There are some who see the Mediterranean as slightly more active and comment that prompt space has thinned. However, the region has been hit by strong winds, and this may have helped contribute to the illusion of tightness since ships were essentially holed up in port.
Transatlantic westbound remains tight for prompt loading, and rates continue on a firm basis. From Rotterdam to the U.S. Gulf, 5,000 tons of benzene/toluene/xylene fetched high $40s/t, while a parcel of caustic from Rotterdam to the U.S. Atlantic Coast had to pay considerably more than the charterers initial ideas of mid $30s/t. Interspersed among the cargoes of pyrolysis gasoline, caustic, cumene and acetone are a couple of base oil parcels from the Med and Northwest Europe to the U.S. Gulf.
Europe-to-Far East sees fewer fresh cargoes this week, although prompt space remains scarce. Freight levels are unchanged for those prepared to wait until late February. The Europe-to-India and the Middle East Gulf route is not overwhelmed with vessels either, which is causing those who have scheduled space to ask for higher numbers. So far, levels in the $70s/t have held sway, and there is no evidence yet of rates in the $80s/t being done for 5,000 ton parcels from Rotterdam to the west coast of India. Some base oils have been spotted fixing into the Middle East Gulf.
Asia
Most charterers have accepted the futility of quoting January cargoes on the domestic Asia market and have switched their attention to either February or even March. With the Lunar Holiday taking place Feb. 9 to 15, most ships are well booked in advance of this, or will be, given the amount of demand there is still out there for this timeframe. Freights are very firm as a result. From Singapore to mid-China, 5,000 ton parcels are notionally talked in the low-to-mid $40s/t, but such is the strength of demand that much higher levels could finally be achieved.
On the Asia export markets, there is also a reasonable amount of demand. Benzene and sulphuric acid cargoes are quoted into the U.S., and because there is a glut of cheap caustic available in Asia traders are looking at shipping it into the U.S., Caribbean, South America, Mediterranean or Northwest Europe in significant volumes. Added to which, there are parcels of phosphoric acid, acetic acid, ethyl acetate, cyclohexane, biodiesel and palm oils to Europe. Furthermore, there are plenty of chemical cargoes, and a few base oils ones in addition, moving from Asia into India and the Middle East Gulf, as well as the regular palm oil traffic. Rates are consequently firm on outbound business from Asia.
In the Middle East Gulf-India region the situation looks balanced. Some pockets of space are cropping up on the eastbound service, but westbound is generally tight, and a good level of demand is seen, with cargoes of benzene, ethanol, MTBE, methanol, caustic and base oils noted.
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.