There has been quite a lot of spot enquiry for styrene from the U.S. Gulf to Europe this week. At least 7 or 8 cargoes of around 5,000 tons each were quoted to Antwerp-Rotterdam-Amsterdam, and most were seeking end of July or August space.

Yet despite this and the fact that there is not much suitable open space available out of the U.S. Gulf on these dates, rates somehow managed to fall from the $70 per metric ton mark to low- to mid $60s/t for 5,000-ton parcels.

Further cargo possibilities include glycols, acrylonitrile, fish oil, phenol, base oil and acrylates, but since July is closed for all intents and purposes, some of these will have to be shifted back into August.

One of the reasons for the current quietness out of the U.S. Gulf is that so much business has already been concluded that there is now a lack of July space, which is certainly an impediment to getting business concluded out to Asia. Traders wish to proceed with August, but owners do not have the August contract nominations through just yet to be able to provide a clear picture as to how much space they can commit to the spot market. Ethanol traders are already hustling for space, and styrene traders are starting to probe too.

In addition, there are enquiries of phenol and acrylonitrile, but nothing has surfaced as to base oils so far.

The mantra for all routes out of the U.S. Gulf over the past couple of months has been no space, and this still holds true on the southbound route into South America. Consequently, almost by default, rates are not increasing as would normally be expected in such circumstances, just because there are so few opportunities to truly test existing rate levels. Owners may rue not having seized the opportunity to maximize freight revenue because demand is unlikely to remain robust forever and at some point rates will have to fall.

Currently, there are enquiries of paraxylene, ethanol and styrene, but base oils are missing.

U.S. Gulf-to-Caribbean routes have been fairly active this week with plenty of cargo enquiry, but with July space almost non-existent, many of the requirements have been deferred into August, or dropped altogether. Base oils continue to be a part of the scene, and there has been plenty of vegetable oil, caustic, mixed xylenes, pyrolysis gasoline, urea ammonia nitrate and small cargoes of clean petroleum.

On routes from the U.S. Gulf to the India/Middle East Gulf region, it has been a tame week with interest in base oils waning. Ethylene dichloride is still a possibility, though traders are looking at alternative sources other than the U.S. Gulf.

Europe

The North Sea and Baltic region has again been flat for smaller lots of clean petroleum, with the exception of gasoline components, which has given plenty to do for the local chemical fleet. Over the course of the week there have been a number of prompt open positions but no more than usual and certainly almost all were able to find employment eventually. Base oil exports from the Baltic to northwestern Europe remain rather thin.

Southbound cargo volumes have been reasonably steady over the past week, but equally there has been enough tonnage around to cover all the cargoes that have been quoted.

The small base oil requirements into Bulgaria and North Africa have persisted, though without a great deal of fervor. The majority of cargo requirements have been large ones instead, such as MTBE, ETBE, fatty acid methyl ester, caustic, pyrolysis gasoline, ethanol, styrene and acrylonitrile. Rates appear to be stable.

Northbound rates have been somewhat firm for cargoes that have needed to be loaded on prompt dates. Shipment of 3,000 tons of aromatics from southern Spain to Antwerp-Rotterdam-Amsterdam paid low 50s/t, which is considerably higher than normal.

Aromatics in the amount of 4,000 tons from the west coast of Italy to Antwerp-Rotterdam-Amsterdam settled in the mid 40s/t, while a further shipment of 7,000 tons of aromatics from the west coast of Italy to Antwerp-Rotterdam-Amsterdam is understood to have fetched high 30s/t. The only base oils activity seen has been in-house requirements.

On inter-Mediterranean routes, Greece saw further interest in clean petroleum cargoes this week, as did intra-Black Sea trade. Base oils have been fairly busy with a number of fixtures concluded.

Turkey has been the recipient of a number of these base oil cargoes and there has been a shipment into Bulgaria. A couple of ships have presented themselves as prompt in the West Mediterranean but there are quite a few prompt requirements still outstanding. Rates in the Mediterranean can be said to be stable this week.

A series of fixtures of paraxylene, mixed xylenes, pyrolysis gasoline and sulphuric acid has mopped up most of the remaining prompt transatlantic ships, but at a cost of slightly lower freight levels.

Ten thousand tons of paraxylene from Rotterdam to the U.S. Atlantic coast fetched very high $30s/t, for example, with several 5,000-ton parcels booked in the mid $40s/t. Base oils have been noted shipping from Augusta to the U.S. Gulf, and the ship that had been fixed for the cargo going from Livorno to Punta Cardon finally showed up. Overall, the route has been surprisingly active for July.

There has been minimal interest from traders to send anything to Asia this week. Only some base oils to Singapore and the odd parcel of orthoxylene, molasses, nonene and some fancy grades of chemicals have been detected. Rates are drifting downwards.

On routes to the India/Middle East Gulf region, several base oil traders have been checking on freight levels to send cargoes to the United Arab Emirates from the Baltic and from the Mediterranean. Part-space is still available on a couple of ships, especially out of the Mediterranean. There could be some good opportunities to secure competitive levels for July loading.

Asia

Intra-Far East markets have been flat with some disruption caused by the typhoon recently, and there are ships available to pick up some of the small parcels of base oils from Korea.

Southbound into Southeast Asia is also described as weak, in spite of the wide variety of chemical parcels noted. Rates have slipped even further since last week, with mid $20s/t apparently achievable for 5,000-ton parcels into Singapore.

Northbound, however, is tight on July space and rates are mounting. Cargoes of 5,000 tons of paraxylene from Kerteh, Malaysia, to North China yielded low $60s/t, for example. Some parcels of base oils have been detected trying to find space into China. Not a lot has been occurring in Southeast Asia since both Indonesia and Malaysia are celebrating religious holidays.

Even more benzene has apparently been booked to the U.S., particularly from Korea and Thailand in August. Rates have started to edge up, with 6,000 tons done in the low $60s/t.

Twelve thousand tons of chemicals were also claimed to have been done into the U.S. Gulf in the low $90s/t for late July, but involved outports. The majority of July space is effectively gone. The market to Europe is mostly confined to smaller parcels or the occasional parcel of cyclohexane. Rates are static for now.

The number of palm oil requirements into India and China is undiminished, with rates holding steady. Rates are also unchanged into Europe, U.S. and Africa.

The Middle East Gulf/India region remains tight on prompt space with many cargoes quoted, sometimes for weeks on end, without finding suitable carriers. Rates remain firm on local trades between India and the Middle East Gulf.

Westbound demand is steady. There are several prompt ships with part-cargo space, and a couple more potentially could come on berth. Ostensibly, there is a rough total of around 60,000 tons of fresh methanol, benzene, MTBE, benzene, acrylates, linear alkyl benzene, ethanol, glycols and paraxylene enquiries quoted this week, primarily to Europe, in addition to all the cargoes last week that remain unfixed.

Going eastbound, there is even more new enquiry, totalling something like 150,000 tons originating from India and the Middle East Gulf, but excluding Iran. Space remains scarce and rates are likely to stay firm.

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 12 0750 7507. In the London office SSYs Ian Roberts can be reached at fix@ssychems.com or +44 20 7977 7560 and in Singapore Jordi Maymi at +65 6854 7127.