Traders out of the U.S. Gulf have been less inclined to sell styrene to Europe which has caused a slight subsidence in rates. Instead, demand for ethanol has picked up following some plant-to-company issues in Europe. It is estimated Europe will need to import around 30,000 cubic meters of ethanol per month for the next couple of months at least.

On top of ethanol there has been interest in cumene, acrylonitrile, reformate, caustic and biodiesel. A 3,700-ton lot of base oils was reported to have fixed recently from the U.S. Gulf to Antwerp-Rotterdam-Amsterdam in the mid $70s per metric ton for loading early December, which is higher than comparable chemical fixtures that have been going in the low- to mid $60s/t for such a volume.

Some owners are not convinced that demand will return in December, with one owner already scrapping a planned sailing in December.

The long holiday weekend in the U.S. did cause some disruption to trade flows to the Far East, which only now are starting to rebuild. Essentially, December space is very tight yet there are still a number of keen charterers which will probably inspire some additional tonnage to come on berth.

Products such as ethanol, ethylene dichloride, phenol and styrene are fashionable at the moment, but unlike previous years there is hardly any interest in exporting base oils. Rates are nudging upwards, and into mid- to high $60s/t territory for 5,000-ton parcels to Mainport Far East, but there is no bonanza for owners this year.

U.S. Gulf-to-the east coast of South America routes in the last couple of weeks have seen enquiry levels toned down and now there are regular carriers that could still use completion cargoes. Ethanol is just beginning to be tested, and if that happens the space will go. If not, rates may continue to creep lower.

Base oils have not been playing any part, and instead it would appear that 3,000 tons of base oils will be loading from Rio to Houston instead.

Base oils have been rather more active on the U.S. Gulf-to-Caribbean route with several requirements noted into Colombia and Rio Haina. Chemicals demand has been rather sloppy and consequently there are several ships that have space into the Caribbean, as well as several more passing through but which could load en route.

U.S. Gulf-to-the India/Middle East Gulf region traders have been running numbers to send parcels of 5,000-8,000 tons base oils from Beaumont or Pascagoula to India in December. So far, no fixtures have been detected but there are certainly ships that have space.

Europe

The North Sea and Baltic region has been fairly busy and most owners managed to fix their ships into December quite early on. A few owners have successfully scheduled their ships through to mid December too.

There is quite a varied amount of business ready to be fixed, but by far the major volume surprisingly consists of products normally associated with gasoline, such as ethanol, biodiesel, ETBE to MTBE, reformate, alkylate and some octane boosters such as cumene.

Base oils have been moving steadily out of the Baltic, with the first fixture from Svetle noted since the early summer.

The array of southbound cargoes currently available for shipment is quite extensive and while there has been a reasonable list of suitable vessels in several cases the cargo loading dates have had to be adjusted to meet the dates of the vessel.

FAME has been one of the main commodities, but there have been many other types of products, such as styrene, paraxylene, ethylene dichloride, caustic, benzene, sulphuric acid, ethanol, acrylates, ETBE, urea ammonia nitrate and acrylonitrile. Base oils have not been part of the cargo mix, however.

Some freight levels for regular, routine northbound cargoes have shown increases over the previous shipment. For example, 5,000 tons of aromatics from the Adriatic Sea to Antwerp-Rotterdam-Amsterdam were reported to have been done at 50/t, when usually they go for rates around 48/t. Interestingly, there has been a spate of base oil enquiries from places like Greece and the Black Sea to Antwerp-Rotterdam-Amsterdam.

There is a familiar shortage of prompt Inter-Mediterranean space in the West Mediterranean, but the impact has been negated somewhat by charterers who have adapted to the situation and no longer quote prompt cargoes but instead quote figures representing levels some 10-14 days out. As such, they are generally able to cover everything at market levels and are not obliged to pay a premium for prompt space as before.

Base oils are moving to the regular spots such as Egypt, Turkey and Morocco, although not in any great volume.

There has been a bit more transatlantic cargo for owners to play with over the past week or so. Moreover, most regular owners have less space than usual until towards mid December.

Benzene, pyrolysis gasoline, toluene, sulphuric acid, caustic, urea ammonia nitrate, paraxylene, acetone, glycerine and magnesium chloride have appeared on the cargo lists, with 6,000-ton parcels being booked in the upper $30s/t from Rotterdam to Houston. A further 5,000 tons was worked at $43/t and 8,000 tons fixed in the mid- to high $30s/t. Base oils are not included in the cargo lists, though.

Europe to Far East demand has been a bit more ragged this week as traders have pulled away from sending larger lots of aromatics and styrene to Asia. Owners who have still got space have been picking up small parcels at discounted rates. An amount of 7,000 tons of base oils was booked Kavkaz to Singapore.

There is undoubtedly some demand from India and the Middle East Gulf for chemicals, but not that many enquiries for base oil. The majority of orders are for small lots of hexane, solvent naphtha C9, linear alkyl benzene, cumene, mixed xylenes, solvent naphtha and acrylonitrile. There have also been several fixtures of phosphoric acid which went in the mid $40s/t while 18,000 tons of sulphuric acid from Aviles, Spain, to Kakinada, India, went in the low $50s/t.

Asia

For domestic Asia trade, the reality is that very little prompt space remains throughout Asia, with most ships fixed ahead by 10-15 days and with a substantial number fixed well into the second half of December.

In spite of this, owners still lack the confidence to challenge existing rate levels and so rates rumble on largely unchanged. Of course, owners are benefitting from low bunker costs these days and do not feel the need to forge ahead with rate increases.

Base oils have been rather subdued within Asia, and the usual northbound and southbound cargoes have been missing. Instead, there have been a number of attempts to ship spot material into India and the Middle East Gulf, the rates for which are in the mid $50s/t for 5,000-ton parcels, with some owners even quoting $60s/t.

The export market to Europe is extremely short on prompt space, which has been exacerbated by a scheduled vessel being damaged by a fishing net caught up in a propeller, flooding the market with prompt relet cargoes. Only one vessel seems to be in a position to cover these requirements and it quoted over $200/t for 1,000 tons of base oils from Korea to Rotterdam, for example – a substantial premium over the usual numbers in the $130/t-$150/t region.

Moreover, there has been a string of small lots of base oil, FAME, cyclohexane, acrylates, heavy aromatics and assorted acid parcels all vying for space.

The market to the U.S. has all been about benzene, the rates for which were incredibly competitive last week in the upper $40s/t, but more recent fixtures have seen owners regain their composure and have raised levels to mid $50s/t.

The Middle East Gulf/India region has not been that active. There are of course the usual cargoes of clean petroleum, styrene, glycols, benzene, linear alkyl benzene, toluene, orthoxylene, caustic, ethylene dichloride, canola oil, methanol, pyrolysis gasoline, MTBE and ethanol, but there has been an adequate supply of tonnage able to meet most demands.

Some base oils have been noted moving out of the Red Sea, but the large lots from Iran and the United Arab Emirates have been missing.

The eastbound situation is not that straightforward. There are several large cargoes of mixed grades that have been pushed around for several weeks already, without being covered. Charterers are however determined to achieve rate reductions from the usual levels.

There is a supply of tonnage but the palm oil trade into India has been slow and there are not that many ships willing to ballast into the Middle East Gulf, only to get stuck for days on end in Al Jubail. A lot will depend upon alternative cargoes.

Westbound space is restricted to a couple of regular carriers in the first half of December since there are not that many outsiders around. Assorted parcels of benzene, vinyl acetate monomer, ethyl acetate, glycols, methanol, MTBE, acetone, phosphoric acid, acetic acid and cyclohexane have been noted. Rates, however, have not changed greatly to Europe and there are some very attractive levels of under $85/t to be had for 5,000-ton cargoes to the U.S. Gulf.

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.