From the U.S. Gulf to Europe, base oils are believed to be shipping mainly under contractual agreements at present, with no discernible signs of spot trading.

Eastbound transatlantic has been reasonably active, with parcels of styrene talked. Some ethanol was booked and there have been parcels of vinyl acetate monomer, acetic acid, glycols and acrylonitrile. Rates are in the region of $55 per metric ton to $58/t for 5,000-ton lots from Houston to Rotterdam.

U.S. Gulf-to-Far East has to be one of the most active routes in the world currently, and that almost every January ship is full is testament to the amount of business transacted, of which most was already booked back in December. February is already starting to look tight, and owners report receiving interest already in their March positions.

Ethanol and styrene are the main products, with paraxylene, phenol, acrylonitrile and cumene also taking out space.

Base oils do not really get a look in. Rates are surprisingly benign, and even though there is so much activity owners are content to accept rates in the mid $70s/t for 5,000-ton lots to China. Base oils would be more expensive, with rates perhaps in the mid $80s/t.

Spot activity has been rather flat on the U.S. Gulf-to-the east coast of South America route. Some base oil movements were detected, along with paraxylene, caustic and ethanol, but rates are weak with space available. 5,000t parcels Houston/Santos are fetching around $60/t-$63/t presently.

There is not a great deal of open space for smaller parcels from the U.S. Gulf into the Caribbean, although base oil activity seems to have dried up somewhat. There are plenty of small chemical parcels, vegetable oil parcels and a few clean petroleum cargoes of 10,000-15,000 tons.

From the U.S. Gulf to India-Middle East Gulf, business has been rather tepid over the last week or two, with few of the base oil requirements having been realized. In fact, not many chemical cargoes have been fixed either, and there is still one ship around that has 10,000-15,000 tons of space for January.

Europe

The North Sea and Baltic region started the New Year with quite a large number of open positions, reflecting the lack of business opportunities in the period between Christmas and the beginning of the year.

Several more base oil cargoes have been fixed out of the Baltic, and there have been some intra-North Sea shipments too. One or two bargains could have been secured right around the end of December and the first day back to work in January, but now that more business is trickling in, owners are feeling less pressurized and rates are stabilizing.

Southbound business has been very much routine in terms of chemicals and several ships have had space into the Mediterranean. A bit of base oil activity has been noticed, and it would be fair to say that rates are generally stable.

The start of the year northbound has been rather quiet, but nor has there been lots and lots of ships needing to go back to Northwest Europe, which means that numbers are pretty much unchanged from the end of last year.

Inter-Mediterranean, whilst it would correct to say that there have been more prompt ships in the Mediterranean than we have seen for many months, it would also be correct to say that the cargo requirements have begun to be churned out, including some spot base oils both in the West Mediterranean and also in the East Mediterranean.

Rates are essentially steady for the moment, with the main advantage being a better selection of ships/loading dates than we have been used to, although it is to be expected that the choice will become more limited over the ensuing week.

There have been a number of transatlantic spot chemical cargoes fixed over the past fortnight, but because there have been plenty of ships on berth, it has had zero impact on freight rates. There have been a couple of paraxylene cargoes booked, some caustic, some urea ammonia nitrate, some bits of toluene, glycerine and wax, but nothing of note in terms of base oil.

The Europe-to-Far East route has been very dull, and apart from the occasional cargo of ethylene dichloride or some mutterings about styrene to China there has not been a great deal, and even some of the scheduled carriers sailed with open space from Rotterdam this week.

From Europe to India-Middle East Gulf, some base oils have been talked about from the Black Sea into India and the Middle East Gulf, with more base oils being traded out of the Red Sea into India. Apart from that, there have been the usual slugs of phosphoric acid from the Mediterranean and vegetable oils from the Black Sea, and again, ethylene dichloride, styrene, isopropanol, solvent naphtha C9 and hexane from Northwest Europe. In spite of this, there is still space for these destinations this month.

Asia

Hardly any new business in domestic Asia was quoted over the long holiday period which has left the region littered with prompt ships. Business is very slowly reactivating itself, but it is going to take several more days to clear the surplus of ships.

Rates on some of the 10,000-ton cargoes of aromatics from Korea to China have dropped to just $13/t-$14/t, whereas a couple of weeks ago they were standing at $17/t-$19/t. Base oils have not got going yet either, with just the occasional parcel quoted.

Among exports from Asia, base oils continue to feature on the way back to Europe, with at least one cargo on the water and another being checked for second half of January. Besides that, there are some smaller parcels of solvents, or acids or biodiesel, but nothing too much to set the heart racing.

The market from Asia to the United States is a different story however. Benzene has been the big thing, with various estimates putting the total January volume to be anywhere between 70,000 tons and 120,000 tons. Some analysts even say more than this, although they may be encompassing India and the Middle East Gulf in their calculations.

All this demand has not rocked rates at all however, and they are still very much planted in the low-mid $50s/t for bigger lots to Houston.

Rates for palm oil remain in a dismal bracket of $28/t-$32/t for 10,000-ton cargoes to India or Pakistan, and there has not been much to say about demand from Europe, Africa or China.

The Middle East Gulf-India region has been rather flat and a substantial number of ships have been scrambling around for cargoes. Base oils have been moving however, with material being shipped from Iran and the United Arab Emirates to India, with further cargoes moving back into the Red Sea from the UAE.

Too many eastbound ships are chasing insufficient business and rates are therefore on the weak side. Bits and pieces of paraxylene, MTBE, orthoxylene, caustic, styrene, glycols and sulphuric acid have cropped up, but it is insufficient to rescue the owners.

New business westbound has been minimal, although there are reports of benzene being fixed from India.

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.