It really is a difficult situation for ship owners caught with fully open tonnage in the U.S. Gulf these days, since there are so few opportunities for them to reposition their vessels into other regions.

The U.S. Gulf-to-Far East route, while having managed to whittle down the overall amount of open tonnage, is still saddled with something like 70,000 tons of space in August spread among a dozen ships or so. So, even though there were a bunch of fixtures over the week, including some sizeable chunks of ethylene dichloride and ethanol, there are simply too many ships and insufficient cargo. Rates are pretty meaningless as a result. By going off-market, it could be possible to fix below $50 per metric ton, even for relatively small cargoes such as 5,000 tons, at least for easy chemicals. Base oils would involve more serious handling but should it fit into an owners existing schedule, there is no reason to think that 5,000 tons could not be done for well under $60/t.

Transatlantic eastbound is steady. Styrene has been one of the main spot commodities, with several discrete fixtures done in the region of low $40s/t for 5,000 ton parcels.

The route from the U.S. Gulf to the east coast of South America sees less caustic than a month ago but evidently a production issue at a plant in Brazil is supposed to have triggered trader interest in sending cargoes of acrylonitrile and phenol, and there have been some remarkably large ethanol shipments recently. Numbers are more or less unchanged.

The U.S. Gulf to Caribbean route is plagued by ships killing time, but spot demand is poor and so rates remain highly competitive. There is talk that the 12,000 ton base oil cargo from the U.S. Gulf to West Africa may finally have been covered this week.

Europe

The coastal market within Europe has more or less managed to limp through the summer relatively unscathed so far. Demand is certainly down in some areas and there are instances of ships that are open in spot or prompt positions, but equally there are ships that are booked through into the second half of August.

The North Sea and Baltic is one such area, although this last week has seen a little less spot volume than the week before, when it could really use a boost. Owners are therefore pretty aggressive when it comes to offering competitive levels in this region, but just about all will back off when the levels start affecting their bottom line.

Southbound into the Mediterranean has been reasonably busy, especially considering that many countries were away for half of the week due to Islamic holidays. Large cargoes of caustic, MTBE, FAME and vegetable oil have helped fill out some of the space. There have been base oil requirements, too, though not all have been firm.

Northbound has been mostly routine and rates are fairly steady. Inter-Mediterranean markets lifted fractionally for the end of July and there was not a great deal of idle tonnage. FAME has been tremendously busy within the Mediterranean and clean petroleum has also contributed to providing employment for ships in the east Mediterranean. Bits and pieces have been recorded on the base oils front but its mostly standard business.

Transatlantic westbound has been fairly active with parcels of paraxylene moving across, as well as toluene and glimpses of benzene and pyrolysis gasoline, but there always seems to be tonnage available and rates remain rooted in the low $40s/t for 5,000 ton parcels and low $50s/t for 3,000 ton pieces.

Europe-to-Asia is sluggish. Traders have been looking to exploit arbitrages for paraxylene, but it is hard-going. Some ethanol and acrylonitrile have popped up, but base oils are not in contention. There is certainly ample space and numbers are inching downwards. Rates are workable in the mid $80s/t, even for smaller parcels.

Some base oil demand features on the route from Europe to India-Middle East Gulf, with some cargoes being fixed from the Black Sea. There is quite good demand currently for vegetable oil space to India from the Black Sea, but owners are cautious about combining base oils with vegetable oils because it could jeopardize their vegetable oil liftings that take place from the Ukraine, even though the base oils are loading from an offshore floating terminal that is supposed to avert such a risk.

Asia

This past week has been a fairly limp affair in the domestic Asia arena. Some owners are booked well ahead by virtue of strong contractual liftings, but there are still quite a few ships able to offer on first half of August cargoes. Rates seem to be under pressure on the southbound route especially, whereas northbound numbers are stable, as are intra-Southeast Asia numbers. Base oils continue to crop up out of Korea and Southeast Asia, but some of the latter are opportunistic and need very competitive levels in order to conclude.

Asia export markets are steady in terms of rates although space is starting to tighten up for August on the Asia-to-U.S. Gulf run. A shipment of 10,000 tons of base oils has been noted from Korea to the U.S., and there are enquiries of benzene and biodiesel too. Biodiesel, solvents, benzene and cyclohexane are showing to Europe, and owners are largely keeping to unchanged rate ideas.

Palm oil demand continues to be quite strong on the routes into India and Pakistan, while deep-sea palm oil rates are steady.

There is not a great deal of open space in the Middle East Gulf-India region. Eastbound rates appear steady while westbound numbers have a touch of firmness.

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.