Nothing much really happened on any of the key routes out of the U.S. during the festive season, and freight rates have started the new year where they left off in December. U.S. Gulf-to-Far East is perhaps the most active of the trade lanes with a resurgence of aromatics demand, in particular paraxylene but also mixed xylenes and styrene, while parcels of acrylonitrile, phenol, ethylene dichloride and ethanol have begun to appear. Space is available in January, but seeing that there is already a fast build-up of demand for space, and that the lunar holidays will start later this month in Asia, it might be prudent for charterers to fix their cargoes as early as possible.

U.S. Gulf-to-east coast South America is busy with contractual demand and completion space is tight until mid-month. Base oils are reportedly looking to ship down to Brazil, along with parcels of glycol, caustic, aromatics and clean petroleum. Transatlantic eastbound is quiet. Some styrene has been attempted into the Mediterranean and Antwerp-Rotterdam-Amsterdam, but apart from some edible oils there is not much out there so far and several scheduled ships have open space within January. Unless more styrene is forthcoming there is a possibility that freights will droop.

U.S. Gulf-to-Caribbean is not exactly humming but space remains tight for the first part of January while attempting to secure space from the U.S. Gulf to Mexico might be very tricky until the end of the month. U.S. Gulf to India-Middle East Gulf is starting to see some activity. There is talk of possible base oil exports but nothing definitive has been reported so far. Ethylene dichloride has also been mentioned, with perhaps 20,000 tons being covered to India in the low $80s/t.

Europe

True to form, it was a sluggish return to work for many in the North Sea and Baltic markets. That said, we do know of some spot cargoes that failed to attract many candidates and we suspect that this is partly due to owners holding back space in anticipation of contractual business, as well as the effects of several weeks of strong winds in the region that have caused numerous delays.

Southbound into the Mediterranean is starting to look a little more vigorous. Some of the prompt ships that were around latched onto cargoes of biodiesel and vegetable oil into the Mediterranean, and we think that volumes will only increase as we go further into the first week. As with many routes in and around Europe, it will take a few days to determine the freight pattern, and for now all rates are pretty well the same as they were in December.

Northbound is not busy so far and there are ships available and probably at competitive levels should there be firm business to be booked. Inter-Mediterranean markets have yet to fully restart due to the Epiphany holiday earlier in the week. The Orthodox holidays are also under way and help explain the paucity of cargoes out of the eastern Mediterranean so far. Transatlantic westbound has seen some tentative enquiries for aromatics, MTBE, sulphuric acid and urea ammonia nitrate have been observed and freight levels are holding steady. Europe/Far East has been active, probably because of the approaching holidays and the wish to conclude purchases beforehand. Large amounts of aromatics have been noted, with some base oils in evidence as well as oxo-alcohols, acrylonitrile and solvents. Scheduled space remains scarce until late in the month which leaves scope for some outsiders to come on berth. Europe to India-Middle East Gulf is also tight on January space with a selection of base oils, aromatics, vegetable oil, phosphoric acid, solvents and acrylonitrile all chasing the same potential outsiders. Rates have a firm tendency.

Asia

It has been a busy week on the domestic Asia routes with a wide variety of potential cargoes quoted. Not all have been for loading later on in the month either. On the tonnage side, the majority of vessels had managed to fix through until about mid-month, and so the prompter cargoes will be gratefully received. Already, parcels of base oil have been cropping up, whether from Korea to China or northbound from southeast Asia. Rates are initially expected to track the levels from December but if demand continues to build, as is usually the case before the Chinese New Year it may not be long before freight increases are being applied.

Asia export markets do not appear to be that busy and we see plenty of open tonnage in January, yet we also hear of reports that fewer benzene cargoes are moving to the U.S. because of a shortage of space. If there are indeed fewer shipments we doubt it has anything to do with a lack of space and indeed expect freights to decline further. There have been reports of base oils moving to the U.S. from Taiwan and the Middle East Gulf, which is an interesting development.

Palm oil markets have given ship owners little to cheer about with trade remaining subdued. Activity levels are slowly starting to resume out of the India-Middle East Gulf region but in the meantime there are still some ships that could use some additional cargo which are keeping rates at unchanged levels.

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.