Things have been on hold for a while on the U.S. Gulf-to-Asia trades, but this is understandable in light of the approaching Asian holidays, as well as the tight vessel situation in the U.S. Gulf, which has been driving up freight rates for a couple of weeks already.

Transatlantic eastbound is firm, thanks to a fair amount of styrene being fixed with rates in the mid-high $40s per metric ton. A number of benzene transactions have come to light, too, as traders capitalize on high European benzene prices.

U.S. Gulf-to-Caribbean and U.S. Gulf-to-east coast of South America trades have been somewhat dull, however, and little fixing has been going on. Rates are stable in these markets. Base oils have again taken a back seat.

Europe

The month end has not brought any respite to the beleaguered North Sea and Baltic market, and a large number of ships are open within the next seven days. Freights have taken another knock in this area.

The southbound route into the Mediterranean has not been as rosy as before either. Space abounds and rates are weaker. A cargo of 7,000 tons of biodiesel from Antwerp-Rotterdam-Amsterdam to the west coast of Italy went for under 30/t, for example. Base oil activity has been largely confined to oil majors movements with few spot opportunities forthcoming.

Northbound has already been flat for several weeks and this situation has not changed.

Intra-Mediterranean markets have eased up and demand is not as strong as it was. In terms of base oils, there have been some shipments into Turkey from Greece and Italy, but very little base oil spot activity has taken place out of the Black Sea.

Transatlantic westbound has been a pleasant surprise and has seen a good run of pyrolysis gasoline. Rates have pushed into the mid $40s/t, with even some traditionally low-paying caustic movements fetching rates over $40/t. Base oils have been part of the action, although almost all is related to oil companies in-house transfers.

Freight rates on the Europe-to-Far East service have come under renewed pressure and there have been reports of numbers in the $70s/t being achieved, even for later October shipment. Furthermore, there is still prompt space to be covered and a trader with a firm 5,000 ton cargo could probably exact a number in the low $70s/t, and still be rewarded with gratitude from the ship owner.

Freights to India-Middle East Gulf destinations are actually higher than those to Asia, chiefly because of higher demand.

Asia

A series of public holidays are imminent in Asia and activity in domestic Asia markets has naturally been curtailed. However, were it not for the holidays, the tonnage situation might have looked tighter. For once, aromatics have been on a backburner, probably due to unattractive product pricing as well as some shortness in supply since several plants are running at reduced rates or have even shut down for maintenance, or in the case of paraxylene, have closed because of poor economics. Base oils have been fairly busy, helped by production from some new sites in Asia that wish to make a mark on the market as well as some trader business out of Southeast Asia.

Asia export space is pretty tight already for October. To Europe, there are cargoes of benzene, cyclohexane, acetic acid, vinyl acetate monomer, biodiesel and some in-house base oil shipments. Rates are strong but do not seem that much higher, though space is becoming distinctly scarcer. To the U.S., the flow of benzene has eased up, but with limited space left for October, it should mean that rates are not enflamed further.

Routes from Asia to India-Middle East Gulf are also restricted on space for October. Base oil rates will be in the $70s/t for small parcels and $50s/t for moderately large cargoes.

Palm oil is active into India as well as to China, with numbers heard above $40/t to the west coast of India, even for big lots. Some view the Middle East Gulf-India region as quieter this week, but we still see a lot of demand in the 5,000-15,000 ton category. Products such as methanol, ethylene dichloride, glycol and aromatics are being shown eastbound, while westbound has seen methanol, benzene, styrene, ethanol and caustic. Strong rates are again reported, with 18,000 tons of benzene from Al Jubail, Saudi Arabia, to Antwerp-Rotterdam-Amsterdam commanding mid $70s/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.