The route to the Far East is still the most significant of all U.S. routes, in spite of the artificial slowdown imposed on it by the AFPM conference. Space is exceptionally scarce in March and well into April, and the only real way to secure space is either through the cancellation of another cargo if a ship runs late, or by ballasting a ship over from Europe. The latter would mean paying rates of $85 per metric ton for 5,000-ton parcels from Houston to Mainport Far East.

The only other alternative is to sit it out and book space for May loading, which will be cheaper at $75/t for the same parcel, except not many owners are able to program space that far in advance with any great certainty. Moreover, methanol continues to be fixed – even for May. There is also said to be a need for styrene in Asia, although ideally it should load in the second half of April.

In transatlantic trade, very little scheduled space remains, and owners are looking to secure levels in the low- to mid $70s/t for prompt 5,000-ton parcels from Houston to Rotterdam, the Netherlands.

However, demand may have backed off a little too. The styrene arbitrage has eased, while product shortages are affecting some of the other grades that have recently been shipping to Europe. Base oil traffic has hit the buffers too, meaning owners may have to reassess what rates to offer once Easter is out of the way.

On routes to India and the Middle East Gulf, all the scheduled carriers profess to be full for April. Unfortunately, no additional tonnage has been fixed on berth so far, although there are certainly some large chunks of chemicals such as ethanol that might stimulate that process.

At the risk of sounding like the needle has stuck in the groove, the U.S. Gulf-to-Caribbean routes are identical in message to all the other routes: prompt space is just not available right now. As it is, there have been several tenders for products such as caustic that have been up in the air somewhat through lack of suitable vessel space. For small parcels of, say 1,500 tons of base oils into Rio Haina, levels would currently be just shy of $60/t.

It should not be a big surprise to learn that space is tight into Brazil for the rest of March. A paraxylene cargo of 7,000 tons from Beaumont, Texas, to Suape paid $65/t, for example. There is plenty of caustic searching for space. Ethanol has also been noted from time to time, while a prompt base oil requirement has had to be pulled back due to the lack of space.

Europe

The decline in the amount of spot market business in the North Sea and Baltic regions has continued for another week. Moreover, owners are faced with a long weekend approaching and there will certainly be idle tonnage if things carry on like this.

Rates are under downward pressure too, especially for cargoes that are to and from the main ports and therefore incur no particular deviation for the ship. Base oils are also rather quiet out of the Baltic at this point.

Whilst southbound trade has not been particularly busy, space is balanced, which has caused rates to remain stable. One of the reasons for the balance is that there is a noticeable shortage of space in Portugal and the Iberian Peninsula area, and charterers with cargoes out of those areas have been prepared to encourage ship owners to ballast their vessels south by paying slightly higher rates than normal. Traders have looked at sending parcels of base oil into North Africa.

There has been a wider variety of cargoes quoted northbound, making this one of the more active routes. Several attempts have been made to ship base oils from the Black Sea, Greece and Italy up to northwestern Europe. Rates are felt to be fairly robust in light of the heightened demand.

In Inter-Mediterranean trade, products that have been subdued over the past week or two – such as clean petroleum in the Black Sea and biodiesel in the West Mediterranean – have started to perk up again. Vegetable oil remains quiet but grades such as MTBE, caustic, methanol and aromatics have been a little more upbeat.

Base oils have also been active, both in the Black Sea and in the Mediterranean. Rates are stable to firm. Parcels of 2,500 tons from southern Spain to Marmara, Turkey, for example, have seen levels in the low- to mid $40s/t.

Transatlantic westbound trade has not been particularly active. Paraxylene is about the only type of aromatic being fixed currently. Caustic is not moving and is in tight supply due to a series of plant turnarounds, and indeed is being shipped back to Europe from the U.S. Some urea ammonia nitrate and sulphuric acid has been moving, but it is sporadic.

Base oils in the amount of 9,000 tons are said to have been fixed from Hamburg, Germany, to the U.S. Atlantic Coast, seemingly in conjunction with 6,000 tons of paraxylene from Rotterdam. A rate of around $40/t has been mentioned. Others looked at shipping a cargo of base oils across from the Baltic, but the cargo is thought to have been withdrawn in the end.

On routes to the Far East, the last bits of March space have almost filled out, with rates between low $80s and low $100s/t, depending upon parcel size and destination. April space is slanted more toward the later stages in the month, which is fortunate for owners because demand has been a bit quiet this week, probably because of the AFPM event.

For trade to India and the Middle East Gulf, owners have been able to take advantage of the tight space situation and a couple of extra ships have been slotted on berth. These have mostly taken parcels of solvents and aromatics, but base oils are reported to have been booked into India and the Middle East Gulf, with further enquiries outstanding.

Vegetable oil has been fairly busy from the Black Sea. Phosphoric acid has claimed several other carriers, although phosphoric acid prices have still to be settled for the second quarter and some ships have yet to receive their final nominations.

Asia

Domestic Asia has witnessed a rather a mixed picture this week. Inter-Far East markets are certainly tight on March space. Fog on the Yangtze River has caused several terminals to cancel operations, leading to berthing delays and a subsequent disruption to vessel scheduling. The majority of requirements are for aromatics – for which the rates are firm. Benzene in the amount of 3,000 tons fixed from Yosu, South Korea, to Kaohsiung, Tawain, in the high $20s/t, for example. Base oils see steady demand, with requirements noted in almost every direction.

In export markets, the build-up of larger chemical units continues with yet more methanol making its way out to China. Many of these ships will have to rely on the upswing in the clean petroleum sector to be able to get back out again afterwards, and whilst few will seriously look at parcelling up with products such as base oil, it nevertheless adds to the pressure on ships that do target this trade.

The April shipment of 10,000 tons of base oils from Singapore to Antwerp-Rotterdam-Amsterdam is reported to have gone at $62/t, which is even lower than the March figure.

Palm oil demand is showing signs of recovery from India and China which will help beleaguered ship owners, and products such as sulphuric acid and urea ammonia nitrate have claimed a few larger vessels too.

India and the Middle East Gulf regional trades have been surprisingly resilient with a number of cargoes being pushed around for a second week. In a couple of cases, the charterers have openly admitted they will pay premiums for March loading. For many owners, however, the region is a bit hit-or-miss.

Eastbound has seen some larger cargoes quoted for April, but westbound has been a little more muted. Rates are pretty stable – 3,000-ton parcels from the west coast of India to Antwerp-Rotterdam-Amsterdam are paying low- to mid $80s/t.

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.