Styrene has been very active from the U.S. Gulf to Europe, with almost all the remaining August ships filling out on styrene, or a mixture of styrene, glycols and acrylonitrile. Further styrene has been quoted right into September, too. U.S. propylene prices are very low currently, giving U.S. chemical producers a huge competitive advantage on feedstocks, which will probably translate into further exports of products such as acrylonitrile.

Europe is short on methanol, too, and there is evidence of some cargoes making their way across. There is no news yet whether the 1,500 tons of base oils from the U.S. Gulf to Antwerp-Rotterdam-Amsterdam that had been attempted last week has managed to fix, but rates are not getting any cheaper – some of these 5,000-ton parcels are in the mid $70s per metric ton. Perhaps mid $60s/t may be achievable from a few owners who have yet to fully comprehend the situation, but those levels are not expected to be available for long.

There is some question as to whether the 15,000-ton base oils requirement from the U.S. Gulf to West Africa was covered, but a large requirement of 11,000 tons of base oils from U.S. Gulf to Durban was fixed. The cargo started off as 8,000 tons but could not attract any interest, and only when the size of the cargo was increased to 11,000 tons did an owner take a shot at it, and even then it paid close to a reported $100/t.

August space on routes from the U.S. Gulf to the Far East has now finally gone, with the last tanks being taken by ethanol shippers. Ethanol continues to be in strong demand going forward too, and rates are starting to shift upward as more enquiries appear. Parcels in the amount of 5,000 tons may be achievable for upper $60s/t for a little while longer, but if demand for space stays as strong as it is now, those opportunities will evaporate too. A 10,000-ton parcel of ethylene dichloride was heard fixed in the mid $60s/t. Other fixtures include methanol, cumene, acetone and biodiesel feedstocks, but no base oils.

The U.S. Gulf-to-the east coast of South America market is much quieter this week and some space can be seen at the very end of August and into September. Rates have not really changed, though.

The U.S. Gulf-to-Caribbean market continues to be short of vessel space, and some of the vegetable oils enquiries that started off looking for space a month ago are still being quoted. Base oil cargo of 1,600 tons from the U.S. Gulf to Rio Haina did, however, manage to get fixed – the rate for which is understood to be in the high $70s/t. A couple of ethanol parcels have been seeking space from the U.S. Gulf to Callao, but owners are looking for rates over $100/t, which is considerably higher than the usual contractual level.

Europe

The North Sea and Baltic region had a much leaner period than the week before. Gasoline components and biodiesel started to dry up by the middle of the week, although clean petroleum has managed to keep going and clean petroleum tankers are mostly fixed ahead by a week, with some owners only able to offer September space. Base oils have been dotted around but are not really that busy. Rates are weak. A 2,000-ton parcel of chemicals from Antwerp-Rotterdam-Amsterdam to Hull or Immingham, for example, has just fixed in the high 50,000s.

Most of the immediate positions going south into the Mediterranean managed to fill. Some cargoes, such as 6,000 tons of pyrolysis gasoline from Dunkirk to Priolo, for example, were actually hard to cover, and the rate was eventually agreed in the high 30s/t. Some base oils were noted, but almost all were in-house company shuffles with little evidence of trader activity.

Northbound base oil activity has been confined mostly to routine shipments, but overall the route has been fairly steady and ships have been filling. Aromatic cargo of 4,500 tons from the west coast of Italy to Antwerp-Rotterdam-Amsterdam cost mid 40s/t, for example. The trade in small lots of clean petroleum, however, dried up when charterers realized they could fix bigger quantities on small handy-size tankers for almost the same kind of money as for smaller parcels.

The West Mediterranean is no longer as impregnable as before, although it is still not that easy to obtain ships for inter-Mediterranean traffic on given dates and a degree of loading flexibility may still be required. Not as many base oil shipments to Turkey have been logged this week. Rates appear to be easing within the Mediterranean this week.

On transatlantic routes, the tone is softer this week when it comes to discussing westbound rates. Not that they have come off by a lot, perhaps a dollar here and there, but there are a few more positions around. There has been a lot of interest in paraxylene into Mexico, whether from the Mediterranean, Antwerp-Rotterdam-Amsterdam or the Baltic. A small parcel of orthoxylene was booked into Mexico, too, though not at a particularly low level, being reported in the low $90s/t. The cargo was brought down from the Baltic to Rotterdam first.

Traders continue to slowly work on the possibility of sending bright stock over in the U.S. Gulf, and the 25,000-ton cargo of base oils from Livorno to Venezuela is known to have been fixed.

Very little is occurring on the Europe-to-Far East market. Base oils seem to have gone quiet for now and even regular chemical activity is dull. Rates have not really been tested so far, but there is space on berth and a firm cargo should be well received by owners, though none has so far reacted to some charterers freight ideas in the $60s/t.

There have been a few more bits and pieces quoted into India and the Middle East Gulf this week, which should help mop up some of the open space. A cargo of ethylene dichloride was heard fixed into India too, and some small lots of base oil have been bandied around for August and September. So far, none has been booked, possibly because there is still a large flow of base oils from Iran into India and the Middle East Gulf at very competitive numbers.

Vegetable oils have snapped up some of the more isolated prompt ships and phosphoric acid shipments from North Africa are starting to escalate.

Asia

Further public holidays in Korea have reduced the amount of trade taking place within Northeast Asia. Prompt space is said to be readily available, and some of the rates in the area look to be under a great deal of pressure. Parcels in the amount of 5,000 tons of paraxylene and glycols have been moving from Korea to China, but numbers have been a mere $15/t-$17/t, even into North China. Parcels of 3,000 tons are said to be achieving just $19/t-$21/t to mid China. Most of the base oils seen so far have been for quantities under 3,000 tons.

Southbound is reckoned to be weak, but most of the obvious owners report being full until September.

Northbound space is readily obtainable too, with few new requirements noted.

Intra-Southeast Asia sees some base oil requirements, but again, space is reported to be ample, which should see rates remain at very competitive levels.

There is not a great deal of transpacific export space remaining, but the arbitrage for benzene appears to have closed for now. Rates are unchanged until the next lot of space opens up in September, but it may mean that rates come under pressure.

Demand is strong to Europe and all the August ships are now full, with rates for many of the small parcels in the $130/t-$170/t range. September space is available to Europe, but it comes at a high cost.

The Middle East Gulf-India region continues to be active. Some owners are content to keep their ships within the region, saying that rates are firm: 15,000 tons of MTBE from one berth in Jebel Ali to another berth in Jebel Ali reportedly cost almost $20/t, for example, and 9,000 tons of chemicals from Al Jubail to the west coast of India paid mid $30s/t. A chemicals cargo of 19,000 tons from Al Jubail to the west coast of India and the east coast of India paid a whopping $46/t. Port delays in Kandla have reduced to 2-3 days, and other Indian ports report similar improvements.

Eastbound remains strong. As one owner put it, Eastbound rocks! Nevertheless, taking the longer-term view, there does not appear to have been that many new requirements quoted, which might take the edge off things.

Westbound has seen an improvement in the number of September enquiries, however, with more styrene, paraxylene, methanol, MTBE, benzene and glycols. Traders had been checking on base oils from Sharjah to West Africa but nothing has been heard fixed so far.

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