The Thanksgiving holiday curtailed the work week in the U.S., but there are some signs that the market is picking up.

U.S. Gulf-to-Far East, for example, has been enhanced by a greater amount of contractual business which has left a relatively small amount of open space for spot business. If demand does pick up some more, then the route could quickly be looking at a shortfall of year-end space, which could boost freight rates. So far, this has not happened and rates have been static in the low to mid $60s per metric ton for 5,000-ton parcels going from Houston to Mainport Far East, but the very next requirement could see those numbers jump.

The route from the U.S. Gulf to the east coast of South America has seen a tightening of December space as well, with rather more spot business around. Rates have firmed slightly for 5,000-ton parcels from Houston to Santos, which now command around $60/t, although there is unconfirmed talk that this level may have been paid already for a 10,000-20,000-cubic meter cargo of ethanol to Brazil.

Transatlantic eastbound continues to see enquiries for styrene, acetic acid, vinyl acetate monomer, phenol and cyclohexane. Space is reasonably well-booked ahead, although small parcels of base oils can usually find a spare tank or two. Some traders are looking at shipping much bigger volumes of base oils to Europe which is the other approach to take and which should also then find a vessel able to take a full cargo. Rates for the small lots will typically be in the mid $60s/t while the 10,000-ton quantities will be in the mid $40s/t.

U.S. Gulf-to-Mexico has seen a slight strengthening of rates as well, with 5,000-ton parcels costing in the low to mid $50s/t region, although numbers are not expected to go too much higher since there are a number of small ships that have repositioned into the area from Europe.

The route from the U.S. Gulf to India-Middle East Gulf still has a small amount of prompt space, but owners are seeing a reasonable amount of contractual work. With no real outsiders going on berth so far, this might limit the number of opportunities for fixing. That said, some traders have been looking at shipping very large volumes of base oil to India-Middle East Gulf before year-end and should any of this get fixed, it might allow for some completion space.

Europe

The North Sea and Baltic market is starting to look a bit more like its usual self at this time of year. Prompt space always exists, but owners have more options open to them and will be more choosy as to what they take. Rates have not changed at all, but owners are paying considerably less for bunkers than during the summer, so their net returns have improved.

Nevertheless, they are in no mood to permit rates to decline because of it. The attitude seems to be that they are still losing money, but not quite as much as before. And talking of bunkers, the change in regulations from Jan. 1 means that much of the North Sea and Baltic will require owners to use 0.1 percent sulphur bunker fuel, which is effectively gasoil. How this would be reflected in freight levels was a subject of much discussion for the past couple of months, but it would seem that the majority of owners will agree on a lump sum bonus for the low sulphur fuel oil to be used and then simply negotiate freight rates separately in the normal way.

Southbound into the Mediterranean has produced a substantial amount of biodiesel into the West Mediterranean and vessels are easily filling up. There is also good demand into the East Mediterranean and space is fairly scarce. Base oils are represented with enquiries into Turkey, Morocco and Egypt.

Northbound is fairly active, too, with some big slugs of methanol, MTBE and reformate.

Inter-Mediterranean business is active and there are fewer prompt ships available this week. Base oils are moving into Greece and Turkey, although rates have not altered.

Transatlantic westbound is busy and freights have inched up some more. Paraxylene, pyrolysis gasoline, sulphuric acid, acrylonitrile and MTBE are the primary products.

Europe-to-Far East has been tight on prompt space for some time but it would seem there may be a bit more space towards mid- and late December. Rates for 2,000-ton parcels to Yangtze have been in the $115-120/t region, and around $100-105/t to Singapore.

Some base oils are still being quoted into Singapore, but the main thrust for base oils seems to be into the Middle East Gulf and India, with a variety of different parcels quoted.

Asia

As expected, almost all the prompt ships that were open on the domestic Asia routes have secured employment. What little space there is left is to be found mostly in Southeast Asia, but not for intra-Southeast Asia cargoes (since that market has been busy) but more for northbound business, since owners would like to send their ships up into Northeast Asia where the market is undergoing a mini boom.

Rates for 2,000-ton parcels from Korea to mid China, for example, have risen into the mid $30s/t, up from the mid $20s/t a few months back. Several owners are already boasting of having no December space left and their first open positions are only in January.

Asia export markets have been a touch quieter into Europe, with only the occasional chunk of benzene or styrene quoted, or else there are small parcels of acrylates, acids, isopropanol, vinyl acetate monomer, and so on. Traders are looking to push down levels, but there are not so many ships willing to look at Europe as a destination. Moreover, rates for smaller lots of palm oils are on a par with those of chemicals, and we have heard of numbers over $100/t for 10,000-ton cargoes, for example. To the U.S., there has been a considerable amount of benzene being fixed, again, as forecasted. Rates are in the mid- $50s/t for 25,000-ton cargoes, but interestingly, the rates for smaller lots have dipped into the low $60s/t because after taking the large lots, the bigger ships need something with which to complete.

Asia-to-India remains firm, with quite a bit of base oil interest. Rates are into the $70s/t for smaller parcels and around $60/t for slightly larger volumes.

Regional palm oil trades are a touch quieter, but deep-sea destinations continue firm.

The India-Middle East Gulf region should have been quiet over the past week or so due to a big industry event taking place in Dubai, but in fact, there were a lot of cargoes quoted, both eastbound and westbound. Rates westbound appear strong, with mid- $80s/t being booked for 5,000-ton shipments into the Mediterranean. Eastbound numbers are stable.

Adrian Brown is senior market analyst for chemicals and base oils with SSY Shipbrokers, London. Information about SSY can be found atwww.ssyonline.com. Adrian Brown, in the U.K., can be reached atfix@ssychems.comor by phone at +44 1207-507507. In the London office SSYs Panos Giannoulis can be reached atfix@ssychems.comor +44 20 7977 7538 and in Singapore Jordi Maymi at +65 6854 7127.