There is not exactly a year-end rush to the U.S. market, but rather, more of a gradual series of bookings.

This is very noticeable on the U.S. Gulf-to-Far East route where December space has been completely booked. Freight rates have drifted upward with 10,000 tons of cargoes on U.S. Gulf-to-Mainport Far East fetching high $60s per metric ton, yet, there are still several requirements outstanding, including paraxylene, ethanol, acrylonitrile and styrene. The only way these will get covered is if some additional tonnage goes on berth, in which case, the owners will probably look for a premium to be added to the usual rate.

U.S. Gulf-to-east coast of South America has registered a slight increase in rates, with 5,000 tons of parcels going from the U.S. Gulf to Santos seeing levels close to mid $60s/t. One of the main reasons for the increase is a robust contractual market, which means that scheduled carriers do not have much space left. The other main reason is the strong clean petroleum market in the Caribbean and the sluggish vegetable oil market out of Brazil and Argentina, which means, that owners prefer not to send their ships southbound. There is some spot demand, mostly paraxylene, caustic and urea ammonia nitrate.

Base oil demand seems to be covered for now, with only some small enquiries popping up in the U.S. Gulf-to-Caribbean market. In this area, there are several ships that have December space, but the owners prefer not to offer on ports that are not within the existing schedule. For this reason, there are quite a few cargoes that remain unfixed within the region.

Transatlantic eastbound is balanced. Some styrene, cyclohexane, acetic acid, biodiesel and urea ammonia nitrate cargoes have yet to be covered, however, there are several ships that equally still have some space and consequently, freight rates are unchanged.

There are some reports of base oils being fixed on the U.S. Gulf-to-India route, though these have still to be verified since it was only a few weeks ago that a couple of base oil shipments were cancelled.

Europe

There has been a steady flow of spot requirements in the North Sea and Baltic, more than any great rush of new demand. The majority of ships are booked past the Christmas period but still need a couple of voyages before they can claim to be finished for the year. Owners appear relaxed with ample time to get things squared away before year-end.

Southbound into the Mediterranean has been busy again, particularly with shipments of biodiesel and many regular carriers are full through to January. Some base oils to Turkey have been seen, but other than that, there are requirements for benzene, acetone, vinyl acetate monomer, acrylonitrile and glycols.

Northbound has been robust, helped by some larger cargoes of methanol and pyrolysis gasoline, with additional requirements of, wax, caustic, mixed xylenes, toluene, reformate and some base oils (for transshipment) quoted. Rates are generally firm – 7,000 tons of aromatics shipping from the West coast Italy to Antwerp-Rotterdam-Amsterdam fetching mid 30/t.

Inter-Mediterranean has produced a couple of base oil fixtures, notably to Turkey and North Africa. Space is fairly well booked ahead within the Mediterranean and rates are maintaining a firm track.

Transatlantic westbound has seen more of the same demand for pyrolysis gasoline, benzene, paraxylene, caustic, sulfuric acid and urea ammonia nitrate. One or two base oils cargoes to Mexico and the U.S. Gulf feature on the list of requirements. Freights are strong because December space is scarce, many regular carriers having already fixed into January. Some of the 10,000 tons of cargoes of aromatics have been paying low-mid $50s/t, but the same numbers have been done on 5,000 tons of parcels.

Northwest Europe-to-Far East is not especially busy, but contractual demand has been strong enough to fill out the majority of scheduled space, which in turn has allowed a couple of outsiders to come on berth. Base oils have been fixed by producers (in the $90s/t for 7,000 tons of cargo) but traders have not been able to conclude anything so far.

Base oils have also been noted on the Northwest east coast of the India-to-Middle East Gulf route. Rates are stable.

Asia

There has not been much of a year-end rush in the Asia domestic markets, with perhaps the exception of the northbound route, which is seeing better demand for aromatics and biodiesel, thus putting a little upwards pressure on rates. There is also some movement of clean petroleum in Northeast Asia, which is normal for this time of year. Otherwise, there are still ships with part-cargo space to fill before the end of the year. It should be possible that they manage to get covered, but it certainly is not causing freights to increase. A number of base oil requirements have still to be fixed from Korea, with some demand noted from Southeast Asia and China.

Asia export t markets are still fairly solid. Benzene and biodiesel are being shipped to the U.S., while parcels of solvents are being booked back to Europe. Rates are largely stable.

Palm oil markets are generally flat and rates stable, but as charterers point out, bunker costs in Singapore are barely $350/t, which is a $30,000/day saving for owners running a standard 13,000 tonner, and charterers feel that owners ought to reduce the freight levels accordingly.

In the Middle East Gulf-to-India region, things have gone rather quiet on the eastbound route, and there is still December space available. Westbound is generally well balanced and freights unchanged.

Adrian Brown is a 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.