Transatlantic eastbound has been the most dynamic of the U.S. markets with a succession of requirements, and as SSY has reported for the past couple of weeks, space has thinned out to the extent that freights have rocketed.

On the U.S. Atlantic coast-to-Antwerp-Rotterdam-Amsterdam route, a 4,000-ton cargo of phenol was booked at $105 per metric ton, as an example – some $30/t above rates of six weeks ago.

A further 5,000 tons of phenol was fixed from Mississippi to Antwerp at $77/t.

Phenol, acetone and cumene have been in demand due to plant issues in Europe. It is the same with cyclohexane – again, due to some European production problems.

Styrene, yet another of the hot items, is also moving across for the same reason, but in this case, has already been happening for the past couple of months. Benzene, ethylbenzene, glycols and acetic acid have been added to the list.

A couple of base oil fixtures have been confirmed, but in most instances these have been regular shipments. All the same, the freight levels for these have risen too, with a cargo of around 4,000 tons booked from the U.S. Gulf to Antwerp-Rotterdam-Amsterdam in the mid-to-high $60s/t.

Freight rates have been steadily rising on routes from the U.S. Gulf to Far East due to lack of space, but compared to the transatlantic market, the increases have been much more moderate, which is surprising, as June space has become much tighter.

Around 5,000 tons of styrene, glycols and simple aromatics were covered in the mid-to-high $60s/t, but as word gets around, it is probable that rates will jump significantly. Base oils have been testing the water, but are more sensitive to freight than some of these other commodities.

On routes going from the U.S. Gulf to the east coast of South America, freight rates have risen as well. Again for the reason that contractual demand has been robust, leaving little space on scheduled carriers for spot parcels. Normally, the excess would get snapped up by an outsider coming on berth, but, as is the case with the entire U.S. market, there are not that many outsiders around, and those owners who do have a vessel in position can simply sit back and cherry-pick which route to opt for and at a premium over the usual level.

Base oils are moving on this route, and the 7,500 tons on U.S. Gulf-to-Rio that had been enquired upon last week has been fixed at around $80/t. Other cargoes include paraxylene and caustic, and there is mention of ethanol being worked as well.

There’s not much space remaining on the U.S. Gulf-to-Caribbean route either. Colombian demand is heavy, and includes yet more base oils, and there is a string of vegetable oil parcels that have been waiting for weeks for space to free up but have not yet been covered. A small enquiry of base oils was noted on the U.S. Gulf-to-Mexico route as well, for prompt loading.

U.S. Gulf-to-India/Middle East Gulf routes have been steady this week. Several base oil requirements have been worked to India and the Middle East Gulf, while higher-paying cargoes of phenol and acrylonitrile have also been noted. Also, 30,000 tons of ethanol is reputedly fixed.

Europe

The North Sea and Baltic regions took a breather due to the long weekend around the Ascension Day holiday, and there were instances of owners who changed their stance in the run-up to the holiday, preferring to have their ships fixed rather than return to work and find that demand had evaporated.

As it happens, demand rose from where it left off. It is the season for gasoline and there has been a marked increase in the amount of gasoline components being shipped, which tends to favor owners with smaller ships due to the typical sizes of cargo. Base oils have focused mainly on term supply and deep-sea shipments from the Baltic rather than movements down to the United Kingdom.

Not much has changed on southbound routes. Demand is respectable and owners are not having much difficulty in filling their ships into the Mediterranean. Base oils have been noted but almost all have been in-house or regular deals. There are quite a few larger chunks of chems being quoted, including methanol, ETBE, caustic, ethylene dichloride, paraxylene and styrene.

Rates on northbound routes are generally steady and fixing has been largely routine. Products such as aromatics, pyrolysis gasoline, fatty acid methyl ester, styrene, ETBE and acids have been worked this week.

Prior to the Ascension Day holiday, there was a dramatic slowdown in inter-Mediterranean demand and it seemed that several more ships would start the new week in almost prompt positions. However, the pent-up demand that has been sitting there in the wings, waiting for this moment was unleashed and almost all those prompt ships were picked off within hours. The market is again back to looking tight on prompt space and rates have simply reverted to the firm levels that were in place before. Base oils have been quiet during this phase.

Transatlantic rates have decreased since early last week, mainly because there are several larger ships around still within May and which need completion cargoes, while demand for some of the more regular commodities such as paraxylene fizzled out, since producers had no further material for sale. Until that point, a number of cargoes of paraxylene, pyrolysis gasoline, caustic, urea ammonia nitrate and sulphuric acid were booked, with rates revealed to be low $40s/t. Some bright stock has been enquiring about shipping into the U.S. Gulf and there are reports too that a lot more base oil will be moving to Venezuela, following last weeks fixture.

Europe-to-Far East space is reportedly tight in May, but there was nevertheless sufficient room to squeeze on 5,000 tons of paraxylene, which paid in a range from $85/t to $92/t, depending upon discharge port, suggesting that owners were a little less aggressive than they have been claiming. However, now, there really does seem to be some tightness and the next fixture could set a new, higher benchmark. Cargo volumes are basically thin and there is little which can be used as a way to bring on berth any outsiders. Base oils have been quiet.

Routes from Europe to the India/Middle East Gulf region have quite a rich and varied list of requirements, including base oils, but all the same there are a couple of ships that still have space both from Northwest Europe and the Mediterranean, and in the face of this rates are likely to remain unchanged.

Asia

Some routes in domestic Asia are busier than others, but only on a couple can it be said that space is tight. Perhaps the intra-Southeast Asia service is such an example, but rather than demand causing the lack of tonnage, it seems to be more port delays and congestion that is occupying the vessels. Base oils and methanol are among the more frequently quoted cargoes, but rates are certainly not firm.

Fog has been encountered in some of the Yangtze ports, and this too is causing some kind of artificial employment as ships appear busier than they really are.

Northbound is another busier route, with some small lots of base oil quoted, whilst southbound is not that active, and there are fewer small lots of base oil quoted.

Asia export owners are clinging on to their strong rate ideas,even if it means that the ship sails with part-cargo space since they are fairly confident of filling out either from Southeast Asia with oleochemical products, or else taking something from India/Middle East Gulf.

Overall, demand is not exciting, with only the occasional parcel of benzene or cyclohexane to Europe and even little spot activity from the U.S.

Asia-to-India is viewed as busy by some, and space is reckoned to be much tighter. Others feel there are still some good possibilities to pick off space and they do not believe that rates are increasing. It is usually a timing issue, with both views correct, depending upon loading dates.

Rather more base oils appear to have been booked into India/Middle East Gulf on a spot basis, in addition to the usual contractual supplies. Rates are stable.

Demand for May space of palm oil into India has been strong, with the result that charterers have been willing to pay more. Rates in the mid-$30s/t have become the established level for either India, with isolated examples of owners claiming to have received even higher levels. Other markets, however, have not been as prolific and rates are more or less unchanged.

The Middle East Gulf/India region continues to be very active and rates are strong. It is not uncommon to see cargoes quoted for two or three weeks and still not be successful in finding a ship. Owners have been honing in on the better-paying cargoes, but there are risks attached to some, especially those involving Indian ports.

Delays in Kandla are claimed to be 5-7 days, but some owners have experienced delays of 10-12 days.

Base oils are noted in and around the Red Sea, India as well as some exports from Iran. Small parcels of 2,000 tons from the Middle East Gulf into the west coast of India can easily fetch $60-$70/t, and sometimes more.

Adrian Brown is a 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.