Space from the U.S. Gulf to Europe continues to be in short supply, with styrene again in the vanguard. Rates for a simple 5,000-ton package from Houston to Rotterdam for the second half of September can be fixed in the mid $60s per metric ton, but prompter dates will lift the level into mid $70s/t, while Mississippi loading will cause it to broach $80/t. Only a relet contractual movement of base oils has been noted in this environment, with everything else being chemicals or vegetable oils.

The U.S. Gulf-to-Far East market is somewhat stagnating following Chinas decision to devalue its currency. Recent jitters on the stock market have not helped either. Ethanol is the main crop, with various sizes of cargo quoted, ranging from 3,000 tons to 30,000 tons, but there has also been some interest in glycols. September space can still be found after a couple of styrene shipments failed subjects. Rates are stable to firm at present.

The route from the U.S. Gulf to the east coast of South America remains subdued, with a bit more open space bubbling up in September. A few parcels continue to be quoted, but no base oils have been so far.

There does not seem to have been any fundamental changes to the U.S. Gulf-to-Caribbean route. A couple of early September ships could still have space, but equally there is a mass of unrequited cargo that has been looking for space for weeks that could easily soak up any vessel that declares the Caribbean as its destination. Some of these cargoes, such as vegetable oil and tallow, are notoriously low-paying and thus end up at the back of the queue. Base oils have not been much in evidence this week.

There is some September space around among the scheduled carriers going from the U.S. Gulf to the India/Middle East Gulf region, and rates have fallen as a result. A 10,000-ton cargo of base oils from Houston to the west coast of India could fetch low $70s/t currently, if no heating is required.

Europe

The North Sea and Baltic region has become much quieter and the list of prompt open ships has grown considerably longer. Freight rates have come under pressure as a result. Routine base oil business continues as usual, and there has even been a couple of Baltic shipments performed.

Overall, the southbound route into southern Europe has been a little slower with less new business quoted, but the level of competition so far has not been that great and the majority of ships have been covered at unchanged levels.

Base oils have been primarily moved by oil companies shifting material around, with spot sales into Turkey hampered by exchange rate issues which are expected to linger, at least until the elections in several months time.

The northbound situation is pretty much the same as last week, with rates being talked at very similar levels. An easy chemical cargo of 4,500 tons from southern Spain to Antwerp-Rotterdam-Amsterdam paid low- to mid $30s/t, which is effectively still a strong number. Another cargo of 3,000 tons from Spain to the United Kingdom paid 15,000 more than the previous fixture of 10 days ago. A 4,000-ton toluene cargo from Italy to Antwerp-Rotterdam-Amsterdam, however, went for low 40s/t, which is a little shy of the rate achieved last week for pretty much the same requirement.

The route is quite heavily influenced by the shortage of space in the West Mediterranean in particular. There are some base oils being moved, and not all of them are routine either.

Inter-Mediterranean space tightened up again in the West Mediterranean after a very brief lull. The usual culprits of FAME, MTBE, caustic and gasoline components have played their part, taking out any space almost as soon as it was fixed inwards. Base oils have seen some spot movements such as the cargo to Morocco from Livorno covering the latest tender.

Not so much material has been shipping from the Black Sea, but the entire river and canal systems within Europe have been badly affected by low water levels that have caused a shortage of suitable barges.

Transatlantic business has been quiet. A 10,000-ton parcel of paraxylene from Rotterdam to Altamira, Mexico, evidently fixed in the mid $40s/t, which is a little lower than would have been expected. Traders are still talking about sending bright stock to Houston, but with another large tender of base oils to Venezuela looming, it is proving much harder to source the available barrels since the tender seems to have priority.

It has been very slow again to Asia, and the latest situation in China is hardly likely to inspire confidence. September space is readily available, but rates are still in a holding pattern simply because there has not been enough firm business out there to test them. Some base oils are under consideration from Rotterdam to Singapore.

Trade from Europe to the India/Middle East Gulf region is sluggish and ships are having some difficulty filling. There are a couple of Mediterranean positions that are still hoping to fill out, and while there have been some small parcels of base oil mentioned, it may be hard to compete against Iranian material. A 1,500-ton parcel of C9 from Algeciras to Kandla achieved $100/t, as a rough guide to levels.

Asia

Domestic Asia trade got off to a more encouraging start for September. Some routes are still a little sluggish but there have been signs of routine business reappearing, such as toluene and benzene into China.

Base oils also had a much busier week, with many of the usual requirements from Korea into China, as well as several into Southeast Asia that are taking quite a while to clear. Rates are suggested to be weak on this route, which may mean that the charterers are pushing a bit too hard to achieve reductions for what are essentially small parcels, or else there really is not the tonnage available to take them.

Northbound also has thrown up some base oil enquiries, from Singapore, Dumai and Rayong. On the face of it, there are a number of cargoes competing for space, such as styrene, paraxylene, pyrolysis gasoline, mixed aromatics and C9, but there seems to be an adequate number of ships around, which should mean freight levels do not rise.

On the intra-Southeast Asia routes, space seems to be fairly well covered at present with some ships even showing October positions. So far, rates are unchanged for now.

Space is still tight for exports on transpacific routes, despite less benzene moving. Owners are shooting for rates some $10/t-15/t above usual levels, with cargoes from outports going at substantially higher figures.

Rates are also very firm to Europe and continue to creep upward as available space disappears. Even owners with later September ships are putting rates of $120/t-$130/t on 5,000-ton parcels from Korea to Antwerp-Rotterdam-Amsterdam, which is some $20/t above regular levels. However, obtaining the usual levels may entail a wait until October.

Some base oils have been attempted from Korea to Havre and Antwerp-Rotterdam-Amsterdam, while the usual parcel of base oils from Malacca to Antwerp paid $5/t more than the August cargo, and it was a larger lot.

The Middle East Gulf/India region continues to be active with a large number of cargoes to be shunted backwards and forwards within the region. There are a couple of prompt open positions, but most of these are the result of ships getting delayed and being cancelled.

Eastbound is quieter, as predicted. There are fewer larger cargoes around and rates may start to wither as a result. There are some base oils of non-Iranian origin that are being quoted around, looking to move to Southeast Asia.

Westbound, however, is busy with cargoes of paraxylene, benzene, glycol, methanol and MTBE quoted. Space is not that plentiful either.

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.