Very little is happening out of the U.S. these days. Eastbound transatlantic is a shadow of itself with only the occasional biodiesel or glycol shipment. Styrene is virtually absent from the spot market, as is ethanol. Fortunately for owners, their contractual nominations are still running at high levels so chasing the spot market is not essential. Freights on this route remain unchanged.

U.S. Gulf to Far East has been checked by the holidays in Asia but should start to see some further requirements quoted in the coming days. All the fixtures reported so far have mostly been over $100 per metric ton, whether base oils into Singapore, or paraxylene into China, or ethanol into the Philippines, or ethylene dichloride into Korea. Nevertheless, there are 5 or 6 ships that still have tanks to fill in February, and if the enquiry is from a main port such as Houston, to a main port such as Ulsan, there is a good chance that a rate of mid-high $80s/t could be negotiated for a 5,000 ton parcel. Anything that does not fit this profile will be liable for numbers over $100/t.

The U.S. Gulf to India-Middle East Gulf route is considered stable, with no rates changes to report.

U.S. Gulf to Caribbean is fairly quiet and rates may be down slightly on some of the key routes, but as soon as a charterer attempts something out of the ordinary that does not suit the vessels schedule, then rates become strong again. Base oils tend to fall into this category.

The route from the U.S. Gulf to the east coast of South America has been much quieter this past week and with several ships holding space still for February there is a chance to contest current freight levels and perhaps achieve a small reduction, such as low-mid $70s/t instead of mid $70s/t for 5,000 ton cargoes from Houston to northern Brazil.

Europe

Spot demand in the North Sea has been strong again, added to which a succession of gales has brought about further delays to ship schedules. In some cases, owners have been unable to perform contractual obligations and subsequently had to look for coverage on the spot market, further tightening the overall space situation.

Milder weather in the Baltic has caused the ice belts to recede, but owners of ships that are not ice-classed are still cautious about sending their vessels into the area. Base oils are mainly heading long haul with few cargoes staying in Europe. Good demand for base oils from customers in the Mediterranean and Turkey have produced a number of shipping opportunities southbound, but base oils have to compete with an impressive array of chemicals cargoes also looking to ship into the Mediterranean. Owners are taking a bullish line on freights.

Northbound has also been busy and there is not that much spare tonnage available. Freight levels are stable-to-firm.

Inter-Mediterranean markets are bustling and cargoes are taking much longer to cover. A degree of patience and flexibility is required as often the selected loading dates are not compatible with the ships that are available.

Transatlantic westbound is not quite as busy before. Benzene and pyrolysis gasoline arbitrages have struggled to work against a backdrop of lower prices in both Europe and the U.S. and while a couple of deals do appear to have materialized, fewer fixtures have come to light compared to the week before. Since there is not a substantial overhang of open space, rates are effectively unchanged.

All the ships scheduled on the Europe to Asia service have been full for a while, with the only space provided by a ship that ran late on an earlier booking and has been cancelled. Otherwise, freight rates remain firm but notional. It is fairly common to see base oils looking to move, the rates for which are typically around $110-115 for 5,000 ton cargoes to China.

Europe to India-Middle East Gulf continues to see base oil cargoes quoted as well. Space is scarce and freights are staying firm.

Asia

The domestic Asia market is still not completely back to pre-New Years activity levels, but there have certainly been many more cargoes quoted. However, in most instances, as soon as a cargo appears it is snapped up and is rarely left uncovered in the market for much more than a day. The speed of fixing is a good barometer of the market and illustrates how much February space remains open. Freight levels, however, are certainly not decreasing, and in some instances we have detected slightly firmer freight rates. A small 1,500 ton parcel of base oils from Singapore to Korea would command freights in the high $50s/t or even low $60s/t rather than low-mid $50s/t as was the case a month or so ago. Even 10,000 ton cargoes of aromatics from Southeast Asia to mid-China have been fetching low $40s/t.

Asia export markets have flourished to the U.S. and typical rates for 5,000 -10,000 ton cargoes of aromatics have ranged from high $50s/t to high $60s/t. However, a relatively small number of ships have been involved, which leaves plenty of others available.

Palm oil markets have seen a slight upswing in demand from the Indian Ocean, while biodiesel and palm oil demand from Europe is about constant.

Asia to India-Middle East Gulf is busy with a wide array of parcels available, which is keeping up freight levels.

However, eastbound demand from the India-Middle East Gulf region has fallen substantially just at the time when there is an influx of additional tonnage which will probably cause freights to soften on the routes back out to Asia.

Westbound routes, however, have been stable with a steady flow of material.

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 Jordi Maymi can be reached at fix@ssychems.com or +44 20 7977 7560.