The U.S. is most certainly the slowest of the three main global markets, but it is hard to identify precisely why. Contractual demand is running pretty smoothly, and the ships that are on berth are typically three-quarters full. Spot demand is therefore not critical, although a contribution to filling the ship entirely would be welcomed, one supposes. But owners are not seeing that much competition for the remaining spot cargoes that they feel they must discount their freight ideas. In other words, there is not a significant surplus of vessels in the U.S. overall, and between the various key trade lanes there is just about enough cargo to employ what tonnage is open in the U.S. Consequently, freight rates remain unchanged across the board this week.

The U.S. Gulf to Far East route is perhaps at that stage where the freights could either go up or down depending on how much cargo volume is quoted within the next few days. There is still some February space remaining on a handful of ships, and while there have been cargoes of acrylonitrile, ethanol and even base oils, the really big volumes of aromatics have been missing.

A large lot of paraxylene was quoted from U.S. Gulf to China for March, and if this signals a new phase of U.S. exports to Asia, then rates will solidify and could even nudge back upwards, but if nothing more is forthcoming then they could easily slip into the low $80s per metric ton for 5,000 ton parcels from Houston to Mainport Far East.

Transatlantic eastbound is pretty stable. Spot demand is patchy but since there is not much space available then the same cargoes seem to be quoted, almost on a daily basis, whether vegetable oils into the Mediterranean or base oils into West Africa.

U.S. Gulf to the east coast of South America is arguably quieter in terms of spot demand and space is certainly available. The promised rush of ethanol has not materialized and even aromatics and base oils are quiet. Rates are hanging on at unchanged levels for now but could drop unless demand picks up.

U.S. Gulf to Caribbean is not very busy, but owners maintain a firm stance with regards freight levels and are generally successful for the time being.

Europe

Freight levels are generally stable or firm in the North Sea and Baltic regions. Spot demand is quite strong. Contractual demand is also running well and bad weather delays continue to affect fleet scheduling to the extent that a surprising number of renewed cargoes have come into the market from owners unable to nominate suitable tonnage. Ice, however, is not an issue in the Baltic, with mild weather reported. Baltic freights have not risen as would be expected in February, but owners should take some consolation in the fact that their ships are running normally and not losing time held up in the ice.

Southbound into the Mediterranean is very busy with exceptionally large amounts of material requiring vessel space. All kinds of products are chasing down whatever tonnage is in position, with the result that freights have risen. For routine cargoes into the West Mediterranean, rates are up by typically 1 – 2/t, while cargoes that require special attention or need specific major approvals can be very high indeed. A cargo of aromatics into Italy, for example, paid an additional 10/t to what is normally agreed, simply because on the dates there was nothing else available.

Base oils continue to be seen going into Turkey, but product availability may see those enquiries switch to Mediterranean loading instead.

Northbound has been fairly busy as well, and at rates that have a hint of firmness about them.

Inter-Mediterranean markets have been throwing out a constant stream of cargoes, too. Most requirements are chiefly of chemicals and clean petroleum, and only a little vegetable oil, although in the past day or so, that too seems to be changing with many more vegetable oil requirements noted.

Transatlantic westbound has not been busy, but contractual demand has been solid and those ships that have space see no reason to drop their freight ideas below the high $40s/t that are customary for 5,000 ton parcels from Rotterdam to Houston. Base oils have been looking at shipping to the U.S., and there is a chance the next shipment to Venezuela could be sourced from the Baltic.

The Europe to Asia route is in a holding pattern. Space remains almost non-existent and so rates are notionally unchanged. Base oils have been seen to destinations in China and Southeast Asia, but no new fixtures have come to light.

Europe to India-Middle East Gulf is equally tight on space and the acid, base oil and aromatics cargoes that have been in the market since the beginning of the month remain unfixed.

Asia

The domestic Asia market continues to pick up as companies return to work after the New Years celebrations and look to replenish stock. The domestic Asia market works off a forwards program that is usually 3-4 weeks out. Now, however, there are a surprising number of prompt requirements, and even though there were quite a lot of prompt open ships, it is beginning to look as though demand is now close to or even exceeding tonnage supply, since many of the smaller parcels are now being re-quoted with revised laycans, as charterers have drawn blanks on the initial prompt dates.

Larger cargoes are not so difficult to fix, however, and there are still many ships of 10,000 – 20,000 dwt available. Such ships will think twice, however, about fixing 2,000 – 3,000 ton parcels, which is the usual size for base oils and many of the small chemicals parcels in the region.

In terms of Asia export markets, there is renewed demand to ship benzene to the U.S., but ships in this size group are uncompetitive against ships of 30,000 – 40,000 dwt, which tend to be the ones parceling up with benzene. Rates are still in the high $50s to high $60s/t for 5,000 – 10,000 ton parcels from Korea to U.S. Gulf.

Asia to Europe is not so active and there is some space available on scheduled carriers, but it is a route that does not appeal to outsiders as there are not that many larger cargoes to be shipped and rates therefore tend to be less volatile.

Asia to India-Middle East Gulf remains firm amid good demand. Palm oils are quiet overall, and although a few new requirements into India have been seen, rates remain weak.

The India-Middle East Gulf market is a little softer these days, especially westbound, where there are a number of ships looking for completion cargoes. Eastbound rates are stable and demand seems to be marginally stronger.