Rates are unchanged across the board in the U.S. market. Europe continues to see an element of tightness on the long haul routes, and in Asia there is still a remarkable amount of demand prior to the holidays.
U.S. Gulf of Mexico
It has been another steady week on the U.S. market with no major changes to report. Gulf-to-Far East has not been particularly busy on the spot side of things, apart from some enquiries for larger volumes of aromatics, yet space is not readily available until second-half February anyway.
Transatlantic eastbound presents a similar situation. There are precious few prompt candidates heading to Europe to really test the levels, but unlike the Far East there are a number of spot market enquiries for styrene and ethanol to Northwest Europe. Most owners indicate freights of around $50/t for 5,000 ton parcels from Houston to Rotterdam.
U.S. Gulf-to-Caribbean gives the impression of being flat, yet there are relatively few prompt ships able to latch on to some of the spot requirements seen. Gulf-to-east coast of South America is another service that is lacking in prompt space, yet freights are surprisingly stable, almost as though owners have given up believing that they can actually ask for higher freights.
For sure, the majority of owners are barely covering operating expenses, never mind any further contributions to capital. Stolt Nielsen published their Q4 2012 financial results this past week which showed the company made a profit of $2.60 million in their tanker division, which is down from the $7 million it made in the same period of 2011. Overall results for 2012 were poor, and only buoyed up by results from the non-shipping divisions. Final figures show the Group made a profit of $70.20 million on revenues of $2.1 billion.
Europe
Bad weather in the North Sea has caused a large number of delays, which in turn has caused tonnage supply to tighten. In the Baltic, the ice-belts have not expanded greatly and most of the base oil ports remain accessible, although the situation can change quickly. Generally, ships without ice-class or experienced crews wisely stay away from the region.
Southbound into the Mediterranean is reasonably busy, with a fair showing of base oil cargoes sprinkled among the chemicals and biodiesel. Rates are mostly unchanged, being around $70 to $75/t for 2,000 ton cargoes from Antwerp-Rotterdam-Amsterdam to Marmara. Northbound is performing adequately and rates are unchanged.
Things have been a bit brighter on the Mediterranean scene insofar as most of the ships that had been idle have managed to find some cargo, even if the rates have been somewhat poor. Base oils feature into Turkey and North Africa.
Transatlantic westbound is tight on prompt space, and owners are a little more bullish on rates. From Rotterdam to the U.S. Gulf, 5,000 ton cargoes still go for under $50/t, but not that much below. Several traders are looking at shipping base oils into Mexico or the U.S. Gulf.
Europe-to-Far East is an odd market to describe. All the scheduled carriers are full for February. There have been a succession of outsiders that have managed to come on berth and almost all are full. However, there are now no larger cargoes remaining that would act as a kind of base cargo on which to go on berth. There are a variety of smaller parcels that still need to be shipped, but rates for 5,000 ton lots from Rotterdam to main Far East ports have reached mid-to-high $90s/t – but this is too low for owners who need levels of $125 to $135/t to justify going on berth.
On the other hand, most of the cargoes are things like pyrolysis gasoline, paraxylene, ethylene dichloride and solvents, for which such rate levels are prohibitive to trade. Consequently hardly anything except specialised cargoes have been fixed.
Europe-to-India and the Middle East Gulf is also somewhat firm, with owners going for larger cargoes of phosphoric acid or vegetable oils, and so levels for 5,000 ton parcels from Rotterdam to the west coast of India have crept up into the mid-to-high $70s/t. One or two base oil parcels have been looking to move in this direction too.
Asia
In the domestic Asia market, there has been a rush of cargoes attempting to find space in advance of the Chinese Lunar Holiday, but this is a difficult task. It is common to see when cargoes are quoted, instead of a laycan the charterer simply asks for the next ship available. Even later February cargoes have been tricky to cover, which may explain why there is a considerable list of March requirements already seeking space.
Rates within the region are generally firm, but mostly fall in a standard range. There have not been too many surprises so far. Export demand is pretty strong, and a succession of unscheduled ships has filled up just on small parcels alone to Europe. In such instances, numbers are firm. A 5,000 ton cargo of base oils from Taiwan to Northwest Europe ended up paying around $115/t for example.
A glut of cheap caustic is moving in large volumes in all sorts of directions, while benzene is being directed to the U.S. Some base oils are also understood to be shipping to the U.S. from Asia.
The India-Middle East Gulf routes are also pretty active. Space is scarce westbound and numbers are firm. Some base oils are making their way into Turkey from the region. Eastbound sees steady volumes of methanol, MTBE, glycols, aromatics and styrene.
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.