The situation is dire for those ship owners who have open tonnage in the U.S. Gulf, and sadly there are plenty of examples of ships that are fully open with absolutely nothing to do. Of all the routes, transatlantic eastbound is the one trade lane that might shift a couple of these vessels, but the owners will have to be prepared to start parcelling up with bits of glycol, aromatics, vegetable oil, ethanol and acrylonitrile.

U.S. Gulf to Caribbean has fallen flat on its face, and 5,000 metric tons of caustic from Houston to the east coast of Mexico, for example, went for a rate of around $19 per metric ton when usual rates have been mid-$20s/t.

The U.S. Gulf -to-east coast of South America route is rather dull, but at least there have been some spot parcels of caustic or paraxylene. Rates are perhaps unchanged for now.

U.S. Gulf to Far East is a disaster zone with minimal activity. Some ethanol, ethylene dichloride, phenol and paraxylene opportunities have been noted, but that is about all there is. Rates are notionally pegged in the $50s/t for a 5,000 ton parcel from Houston to Mainport Far East.

U.S. Gulf to India-Middle East Gulf is also dull, although there may be some small parcels of base oil being worked, along with some vegetable oil.

Europe

It was another hard week for owners with ships trading in the North Sea and Baltic. There are plenty of open positions through the first week of July and freight levels are under intense competition. The small clean petroleum market is perhaps in an even worse condition than the parcels market and so there are a lot of hungry clean petroleum tankers looking to see what kinds of easy commodities can be picked off, including base oils, of course.

Southbound into the Mediterranean has been reasonably active and some of the freight levels mentioned have been fairly strong. A tender for 5,000 tons of ethylene dichloride into Lavera was awarded to traders with material from Antwerp, and they booked a vessel at 32/t, which is a fairly strong figure. Paraxylene in the amount of 3,000 tons from Gonfreville to Algeciras was heard to have gone in the high 20s/t. A haul of 3,000 tons of aromatics from Leixoes to Gebze fixed at $200,000, which is considerably more than usual. Some base oils enquiries were noted, mostly oil company cargoes, although a Baltic to Barcelona cargo was an unusual quotation.

Northbound has been stable. A cyclohexanone load of 4,000 tons from Genoa to Antwerp went in the mid 30s/t, and [SSY Shipbrokers] knows of similar levels done for other cargoes of aromatics.

Inter-Mediterranean markets have been fairly robust, too. There have been plenty of caustic movements, along with MTBE, aromatics, acid, methanol and FAME. A 4,500 ton parcel of base oils from Cartagena to Gebze went at 30/t, which signifies this route is quite strong.

Transatlantic westbound has been fairly active, with cargoes of benzene, pyrolysis gasoline, toluene, mixed xylenes, paraxylene, orthoxylene, sulphuric acid, urea ammonia nitrate and a selection of solvents — some of which are fairly innocuous while others are very hazardous. Base oils were represented by the Punta Cardon requirement. It would seem the material is being gathered from a couple of Mediterranean producers, sent to Rotterdam and then shipped across.

Freights for the aromatics actually strengthened for end of June shipment, and [SSY Shipbrokers] knows of rates that were done in the $50s/t, but there is an overhang of space in Europe and scheduled owners feared that such levels would cause some of these ships to go on berth and then be very competitive and so they dropped the levels back into the mid $40s/t for July shipment.

The Europe-to-Far East route has been so slow that it is difficult to gauge levels. The most recent cargo of paraxylene to China was done in the $80s/t, and there has been another paraxylene cargo booked into Southeast Asia, but now all that is left are small parcels of solvents and specialty chemicals. No base oils were seen. However, base oil demand has indeed picked up into India-Middle East Gulf and several fixtures have been done. A 4,000 ton parcel was heard fixed from Black Sea to Mumbai at $77/t, for example.

Asia

Business has been a touch quieter on some of the domestic Asia routes, such as intra-Far East and intra-Southeast Asia. In most case, contractual demand has ensured that the bulk of the fleet is covered through until the second week of July, but in terms of spot activity, there have been holes and spot rates have inched lower. Some base oil activity has been reported, with cargoes moving to Singapore from Korea, for example, and other traders sending material north into China from Southeast Asia.

Asia Export demand continues to see a lot of small parcels traffic to Europe, with rates quoted in the $140-160/t region from China and $110-140/t from Southeast Asia. There is not a great deal of space on vessels already on berth to Europe, whereas there is a fair amount of space on ships bound for the U.S.

Benzene demand has been low presently, although prices are pushing upward in the U.S. right now and may trigger fresh demand for Asian material.

Asia-to-India is a reasonably active route, with a wide range of products looking to move. Rates are stable. Palm oil rates, however, seem poised to come down with less demand reported from the Indian Ocean. Ramadan in the Middle East Gulf -India region will probably impact trade.

Currently, chemicals demand is strong westbound and there is not a great deal of space. Similarly, eastbound is pretty busy and rates are holding. Regional trades within the Middle East Gulf-India area are actually seeing stronger levels and owners are now keen to keep their ships trading within the region to profit from the higher numbers. Easy chemicals, in the amount of 12,000 tons, from Middle East Gulf to the west coast of India, for example, went in the low $30s/t rather than the more normal low-mid $20s/t.

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.