The U.S. market was highly unlikely to rebound just before a long holiday weekend, and true to form, nothing really developed in any of the U.S. markets.

Transatlantic eastbound tried to muster some interest in styrene, and indeed, 9,000 tons were booked from the U.S. Gulf to Turkey for around $50 per metric ton, but few, if any of the cargoes to Antwerp-Rotterdam-Amsterdam materialised. Rates remain a theoretical $40-42/t for 5,000 ton parcels from Houston to Rotterdam.

The U.S. Gulf-to-Caribbean route reported little action, apart from a bunch of vegetable oil and yellow grease-type cargoes. Venezuela is still surprisingly dormant as a destination for chemical parcels.

The route from the U.S. Gulf to the east coast of South America is steady on the basis of contractual shipments, but with very limited spot demand.

U.S. Gulf-to-Far East remains soft. A cargo of 10,000 tons of paraxylene was fixed and there has been a similar volume of ethanol mentioned, but there is still a plentiful amount of open space in July, going into August. Rates seen for 5,000 ton parcels from Houston to Mainport Far East are around $55/t with $60/t applicable for outport loading. Right now, base oil activity is very slim from the U.S. in any direction.

Europe

Things have not improved for the owners of ships that are confined to trading in the North Sea and Baltic. Even contractual shipments seem to be down over the past couple of weeks and some owners have sent a substantial proportion of their ships down to the Mediterranean to escape from the region. This area has reached the stage where virtually every cargo receives multiple offers, with owners fighting hard on every cargo. There have been instances of regular rates being undercut by as much as 5/t, for example. Clean petroleum markets in this region, however, have recovered to a large extent with better employment prospects, at least for now.

Southbound into the Mediterranean has been reasonably solid with a good range of products being transported, and steady demand means that freights are pretty stable. Base oils are quoted around, but are nearly always in-house business.

Northbound is nothing special but rates appear to be steady and ships are moving.

Inter-Mediterranean markets, however, have weakened slightly and there are noticeably more open positions around. Clean petroleum in the Mediterranean may be a little more active, but vegetable oil is the opposite and there are ships open in the East Mediterranean and Black Sea as a result. Most of the base oils from this area are making their way into the deep sea market.

Transatlantic westbound is not as busy as the preceding week. There have been some fixtures of toluene, mixed xylenes, benzene and paraxylene, but most of this material has originated in the Mediterranean rather than from northwestern Europe. The Mediterranean has furnished another shipment of base oils to Punta Cardon, Venezuela, the first parcel being a delayed shipment from Rotterdam. The Mediterranean cargo reportedly paid around $700,000 for 10,500 tons. There is quite a lot of open space from Rotterdam to the U.S. in the first half of July, and whether rates decline from their current levels of low-mid $40s/t for 5,000 ton parcels from Rotterdam to Houston will depend somewhat on whether the arbitrages remain open for aromatics.

Europe-to-Far East is flat yet again. Some paraxylene and pyrolysis gasoline has been seen, but for once base oils are the headline act. A staggering cargo of 19,300 tons of base oils was quoted from Fawley, United Kingdom and Augusta, Italy, to Singapore, and there has been some trader activity in base oils to the same destination. Base oils have also been fixing from the Black Sea to India-Middle East Gulf, but there is quite a lot of open space on this route now that vegetable oils have quieted down, and freights are starting to weaken.

Asia

On the domestic Asia front, owners have been receiving quite strong nominations for contractual shipments across most of the domestic network, and in general, owners are now covered until mid-July. Coupled with a slight improvement in spot market demand, rates have been nudging upwards, with perhaps a dollar increase both northbound and southbound, with half a dollar going onto rates intra-Far East. There is a steady stream of aromatics moving up from Southeast Asia, combined with decent-sized parcels of palm methyl ester, MTBE, methanol, styrene and glycols. Base oils are represented in this area, with traders seeing what can be done into China. Base oils have also been showing southbound and levels from Korea to Singapore are mid-$30s/t basis 3,000 ton parcels.

Asia export business is steady to Europe with almost all the July carriers full, or on subjects for their last remaining tanks. Since the majority of requirements are for small parcels of solvents rather than large homogenous cargoes, owners are able to resist lowering freight levels on the whole, particularly as many of these parcels are destined for outports in the Mediterranean. There is talk that benzene is being quoted to the U.S. Gulf again, although no new fixtures have been reported so far. Base oils are lagging behind with not much action either to Europe or to the U.S.

Palm oils actually had a busier week, which was unexpected.

The Middle East Gulf-India region has eased off the gas pedal, which is consistent with the start of Ramadan. However, there have been cargoes both westbound and eastbound and rates are reasonably strong. The same applies to rates on regional business between India and the Middle East Gulf.

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.