Activity has continued on the U.S. Gulf to Far East trade lane, but overhang of tonnage on the route is so extensive that freights have fallen even lower than last week, in spite of a quadrupling of the amount of cargo needing to be shipped. And there is still plenty of open space available in June.

A number of 10,000-metric ton slugs have been booked this week, including paraxylene and mixed xylenes, the rates for which have been knocked down into the low $50s per metric ton, even for China discharge. Several 5,000 ton cargoes of styrene have been taken in the $55-60/t region.

Ethylene dichloride in the amount of 10,000-15,000 tons was fixed and there have been reports of 5000-6,000 tons of phenol going from Houston to China at $58/t.

Ten thousand cubic meters of ethanol was fixed from Houston to Philippines in the high $70s/t.

Base oil exports have been negligible in this direction, although there are supposed to be some smaller base oil cargoes looking at shipping from the U.S. Gulf to the west coast of India. Rates on this route have also dropped and 5,000 tons of base oils from Houston to Mumbai could fetch around $85/t currently.

Transatlantic eastbound has benefited from a run of styrene, cyclohexane, biodiesel, urea ammonia nitrate and phenol. Since contracts are performing fairly well there is not a massive amount of open space, although certainly there is more than enough should anyone wish to fix a 5,000 ton chunk from Houston to Antwerp-Rotterdam-Amsterdam, the levels for which would be in the low-mid $40s/t.

U.S. Gulf to Caribbean and U.S. Gulf to the east coast of South America are rather flat currently.

Europe

June has set off at a slightly improved pace compared to the last couple of weeks that have seen owners struggle with a lot of open space. What seems to be hot in the North Sea and Baltic area are products that are linked to gasoline blending such as ethanol, biodiesel and components. Oddly, the small tanker clean petroleum market itself is somewhat deflated presently. Rates remain highly competitive and will do so until some of the surplus space has gone.

Southbound into the Mediterranean has also improved considerably. Last week, there was a substantial amount of larger vessels all jostling for business. As it happened, almost all of them landed large cargoes, mostly of biodiesel, vegetable oil and MTBE which only leaves a few now looking for completion cargoes.

Base oils have been seen looking to ship into Turkey, and indeed, there have been several different base oil requirements for loading in northwestern Europe or in the Mediterranean. Space for smaller lots such as 2,000-3,000 tons is not a problem and rates from Antwerp-Rotterdam-Amsterdam to Gebze should be in the vicinity of $65/t.

Northbound is relatively steady, while ex Mediterranean demand has picked up a little. East Mediterranean space has tightened somewhat and 5,000 tons of easy chemicals from Aliaga, Turkey, to West Mediterranean paid around 3-4/t more than the previous shipment.

There are more acid requirements in the Mediterranean, along with caustic, styrene, aromatics, vegetable oil, MTBE and methanol. For sure, some ships are still available, but owners do have different alternatives available to them right now and so freights are not under any real downward pressure.

Transatlantic westbound saw a batch of benzene requirements although we did not hear of any being fixed. Paraxylene continues to head over to the U.S. and some ethanol was looking at shipping into the Caribbean. Rates are mostly unchanged because some scheduled carriers are already full of contractual business until later in June.

Europe to Far East remains very quiet and June sees a number of positions that have part-cargo space available. All the same, owners have steeled themselves not to accept lower levels with a surprising level of tenacity. Parcels of 2,000-3000 tons from Antwerp-Rotterdam-Amsterdam to Mainport Far East still produce offers in the $90-100/t range.

Europe to Middle East Gulf-India is mostly calm, but there have been some sporadic base oil quotations from the Mediterranean and Black Sea.

Asia

A number of local holidays in Asia obscured the true picture of the domestic Asia market this week. However, owners are finding a steady flow of products in the area — to the extent that most vessels are reasonably well employed. The types of cargoes may have altered slightly. There are fewer parcels of aromatics and paraxylene into China but instead there are more solvents, chlor-alkali products, acids and some base oils. Rates are stable enough.

Asia export business sees a number of base oil requirements to the U.S., in which some suggest is anticipation of the hurricane season beginning later this month. As it happens, the weather watchers predict a fairly quiet season this year. There are a variety of small parcels of solvents to Europe, all paying around $140-150/t and owners are content to mop these up.

Palm oil business has been reasonably strong and rates have nudged upwards to India, with typical cargoes to east coast of India paying low-mid $30s/t and a few dollars more to the west coast of India.

Cargo volumes out of the Middle East Gulf-India region have picked up and there are no June ships left to take westbound cargoes from India for example. Rates are a touch firmer too. Eastbound is also quite busy and rates have also lifted by a dollar or so.

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.