It has been a largely disappointing week as far as U.S. shipments go. The U.S. Gulf to Far East market remains flat. Rates seem to have stabilized to some extent – 10,000 tons of styrene from U.S. Gulf to Far East was heard to have been worked at $68 – $69 per metric ton, but the sale is looking unlikely to succeed, while some of the other requirements that were quoted — such as mixed xylenes and ethylene dichloride — never seemed to materialize.

Base oils are under consideration to Singapore, and some ethanol has been mentioned, but none of these seems fully firm. Several ships still have open tanks for March loading, but may have to sail light.

Transatlantic eastbound saw some interest in styrene, but there does not seem to be sufficient interest from the traders to convert the interest into fixtures.

U.S. Gulf to the east coast South America has managed to introduce a little more variety into the routine diet of caustic and base oils with products such as urea ammonia nitrate and ethanol. However, owners are keen to send ships in this direction to be the first in the queue for the vegetable oil produced by the new campaign down in South America. Consequently, rates are a little weak right now.

U.S. Gulf to Caribbean has been one of the busier routes and space has often been well-booked in advance, but a couple of large cargoes of paraxylene and acetic acid into Mexico have allowed a couple of additional ships on berth which can offer out completion space. Rates will therefore probably stay steady over the next week or so.

Europe

It is not immediately clear why the European domestic market is as busy as it is, but certainly it is fairly uncommon to find ships open in prompt positions. With few bad weather delays, if any, the answer can only be that both contractual and spot demand have strengthened.

Even in the markets that are prone to an excess of space, such as the North Sea and Baltic, ships are busy and freights are firm. This is already the third such month and many pundits believe it cannot last.

Southbound into the Mediterranean is active with a long list of possible requirements. Base oils are on the list, particularly into Turkey. Rates are stable, but there is not much room for negotiation.

Northbound rates are also steady, since owners are able to find enough cargo to carry without too much difficulty.

Inter-Mediterranean markets are very firm, especially for loading in the West Mediterranean. Normally this region sees a lot of imports and owners are usually content to reload their ships with whatever is available, but these days they can afford to be fussy and still crank up their freight ideas. It is common for a prompt cargo not to receive any offers at all from owners, such is the situation nowadays.

Transatlantic westbound is perhaps not the busiest of European routes, but owners are nevertheless able to stop freights from declining. Contract demand is evidently satisfactory, since most of the scheduled carriers have limited space. Spot demand exists with cargoes such as ethanol, sulphuric acid, paraxylene, toluene and even some base oils.

Europe to Far East remains short on space and owners continue to show strong freight ideas. Base oils are frequently seen, and the latest price increase in Singapore could provoke further shipments. Unconverted oil or hydrocracker bottoms are also becoming commonplace.

Europe to India-Middle East Gulf is stable, but without much space noted from northwestern Europe. The vegetable oil market from the Black Sea should bring some additional vessels on berth, which will hopefully have some completion space they can use for base oils.

Asia

The domestic Asia market is still pretty volatile. Some days there are plenty of prompt ships open and freight rates are soft, but on other days, demand is strong and cargo requirements take much longer to cover. This week has been such a week.

Southbound cargoes, such as caustic from China to Singapore, have been fetching mid-$20s/t for 5,000 – 6000 ton quantities, and there have been cargoes of methanol and aromatics. Base oils have also been seen, but rates start at $50/t or more for 4,000 ton cargoes from Korea to Southeast Asia.

Northbound has been more active and some larger cargoes of glycols, aromatics, biodiesel and pyrolysis gasoline have been in the market for nearly two weeks without being fixed.

Asia export is where the real activity lies. Benzene has been very active to both the U.S. and Europe, while methanol has been seen to both destinations and far into April as well. Freights are in the mid- to high $60s/t for the benzene to the U.S., and around $100/t — 105/t for 5,000 ton cargoes to Europe.

Methanol numbers are around the $90s to both destinations from Southeast Asia. The impact of all this export activity has been that all the additional ships that went out to Asia from Europe and the U.S. have been absorbed and space has become very tight for the first half of April.

Palm oil demand is also said to be on the rise to long-distance destinations such as Europe, although trades to India and China are slow.

The India-Middle East Gulf region is a little subdued, especially eastbound, where there is some open space.

Westbound, however, is okay, and there is sufficient demand for the regular owners, particularly since outsiders are not inclined to send their ships to Europe.

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 Panos Giannoulis can be reached at fix@ssychems.com or +44 20 7977 7538 and in Singapore Jordi Maymi at +65 6854 7127.