On the supply side, there is a quantifiable pool of ships that are open in the U.S. over the next couple of weeks. The list is not that large. Yet in spite of this, the mood seems to be one of unease. Owners are not happy to have ships open in the U.S. Gulf, in spite of the tightness, nor are they keen to send further ships into the U.S. from other markets. The problem seems to have its roots in the uncertainty about sourcing material in the U.S.

Transatlantic eastbound for example has been all about styrene and ethanol. Europe is likely to remain short of styrene for some time to come due to a string of factory turnarounds. However, the arb just does not seem to open wide enough to allow shipments to Europe where freight numbers are around the usual $50/t mark. Instead, traders are hankering for numbers in the low $40s/t. With hardly any ethanol quoted to Europe, owners may be caught up in the void and some may acquiesce to lower numbers.

U.S. Gulf-to-east coast of South America is busy on contractual business too, and there have been opportunities to take caustic, styrene, ethanol and base oils south. However, scheduled carriers are full, yet charterers are not that concerned since owners see the potential for export business from South America and so are prepared to accept the current figures of $65/t for 5,000 ton parcels from Houston to Santos.

U.S. Gulf-to-Far East saw the last few tanks fill on the last remaining February vessel this week, yet freights remain at a notional $75/t for 5,000 ton cargoes from Houston to principal Far East ports. Evidently, spot market demand is not strong enough to affect the current rates.

Trade from the U.S. Gulf to India and the Middle East Gulf is lacking in February space, but charterers are getting around this by focusing on March instead, and thereby they continue to attract offers at unchanged numbers. Maybe after the public holiday in the U.S. this week business will start to gain momentum again.

Europe
The deep-sea markets out of Europe are ablaze with cargoes, but there are very few ships still able to provide the February loading dates that the charterers require. In the case of Transatlantic westbound, owners are also unwilling to send ships over because the U.S. Gulf has not been as active as it used to be.

There are reports of 5,000 and 10,000 ton cargoes of aromatics being booked from Antwerp-Rotterdam-Amsterdam to the U.S. Atlantic Coast and U.S. Gulf in the mid-to-high $50s/t, and even $60/t. From Port Jerome to Houston, a 5,000 ton pyrolysis gasoline cargo was reputed to have gone at a level not that much below the original offer of $80/t. There are cargoes of paraxylene, mixed xylenes, pyrolysis gasoline, reformate, sulphuric acid, urea ammonia nitrate, caustic and a couple of base oils parcels that were booked out of the Mediterranean.

Europe-to-Far East lists a similar cocktail of paraxylene, mixed xylenes, glycols, phenol, butanol and acrylonitrile, but no base oils. All the scheduled carriers filled a while back, and so every time an additional vessel is committed to the route the freight rate goes up. Numbers are notionally around $120 to 125/t for 5,000 ton parcels from Rotterdam to China, although this is too steep for most of the aromatics traders, and instead it tends to be charterers with more sophisticated parcels who end up paying. For instance, 4,000 tons of chemicals from the Baltic to China are reported to have gone at $160/t.

Europe-to-India and the Middle East Gulf is also tight on February space, and the outsiders want levels well above the usual $85/t for 3,000 ton cargoes from Antwerp-Rotterdam-Amsterdam to Mumbai.

Short-sea is reasonably busy, and freight levels have jumped on some routes. From northern France to Rotterdam, 4,000 tons of easy chemicals went for over $80,000, when the more recent fixtures have all been around $72,000. In the Mediterranean, there are instances of cargoes that have also paid a premium for prompt shipment. In general however, in the short-sea market the entire tonnage supply picture can change if the loading dates are deferred by a week or 10 days.

Asia
As expected, as soon as the various countries started to return to work after the New Year holidays, then cargoes rapidly started to reappear, many of which had been quoted previously. February space is almost nonexistent on most of the domestic Asia routes, and freight levels for prompt shipment have soared. In the case of northbound business from Southeast Asia, rates have gained $10/t, and 3,000 ton parcels from Singapore to Korea can cost mid-to-high $50s/t.

Asia export markets are busy too, with benzene and pyrolysis gasoline quoted to the U.S. and cumene and cyclohexane quoted to Europe. Biodiesel continues to be quoted to Europe, but once restrictions on the import of Indonesian biodiesel come into force later this year, the expectation is that the material will head to the US instead, which is a new development for this product. Palm oil traffic is a bit subdued after the holidays, but freights are unchanged.

The Middle East Gulf-India region has not been as quiet as some portray. Westbound space has been hard to secure for February, and rates are steady. Eastbound continues to see methanol and MTBE demand from Asia, as well as cargoes of paraxylene, orthoxylene, glycols, ethanol, linear alkyl benzene and canola 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.