The situation on routes to the Far East is pretty much the same as it has been for the past couple of months. Contractual volumes are high, leaving little available space for spot business, and those ships that do show any space are swamped with enquiries. As such, May space is virtually sold out, and cargoes that do get fixed are taken by outsiders – several of whom ballast in from other areas, such as Europe.

Strangely, despite demand far exceeding the supply of vessels, freight rates seem to have reached a plateau, and have been at current levels for some time now.

The occasional base oil parcel still gets discussed from the U.S. Gulf, but the bulk of demand is for ethanol, methanol, styrene, ethylene dichloride, acrylonitrile and phenol.

Firm transatlantic demand seems to have gone a bit stale this week. This may partly be born out of frustration about the lack of prompt space, but it might also signal a bit of a slowdown. The next week or two will be important.

There have been a number of prompt requirements that have needed April ships, such as benzene and styrene, but no such space exists and the enquiries have melted. For May, there have been a variety of cargoes, but the question is, how many of these are firm? Just as importantly, do they have access to vessel space?

Rates are perhaps tracking downwards during this phase, but could equally bounce back up again.

Large slugs of ethanol ethylene dichloride dominate the U.S. Gulf-to-India and the Middle East Gulf trade lane, interspersed with the occasional parcel of acrylonitrile or base oil. May space is pretty tight and so numbers are unchanged.

The Caribbean is already pretty busy, and a fire at a caustic plant in Mexico only succeeded in making the region busier, with caustic enquiries from the U.S. Gulf into various Mexican locations. As it is, there have been methanol and ethanol enquiries into Mexico, as well as a bit of base oil. One of the base oil enquiries into Colombia has reportedly finally been covered from the U.S. Gulf.

If there is a route that merits the accolade of being the dullest out of the U.S. Gulf, the route to the east coast of South America is it. Demand has primarily been focused on caustic, although a cargo of 8,000-9,000 tons of base oils was eventually fixed from the U.S. Gulf to Rio de Janeiro, but there has not been a great deal else to cause excitement.

Europe

As forecast last week, the North Sea and Baltic region has more cargoes being quoted that are associated with gasoline blending, such as pyrolysis gasoline, ethanol, ETBE, biodiesel, reformate and alkylate. Some have even been double the usual size. Unfortunately, there are fewer cargoes of caustic, aromatics, urea ammonia nitrate and solvents. Base oils have also dried up, making the week appear even softer overall than last week.

It has been another week of relatively low southbound demand into the Mediterranean. So far, the majority of ships have been full, and where rates have gone down, there have only been marginal decreases. However, there have been a few worrying trends for owners, not least of which is the growing tendency of some charterers to ship 20,000-30,000-ton cargoes of FAME from Antwerp-Rotterdam-Amsterdam to Spain and Italy.

Until now, owners of small chemical ships could have relied on a typical, 3,000- to 8,000-ton cargo of FAME to help fill their ships, but now they will have to find something else, which could then put pressure on southbound rates in general.

Northbound demand has been a touch slower this week, with fewer of the regular cargoes being attempted. Base oils, for instance, are much quieter. Vegetable oil rates from the Black Sea to the Continent continue to fall, and it is possible to fix 4,000- to 5,000-ton cargoes for under $40 per metric ton, a level which only a few months ago would have been considered the going rate for Mediterranean destinations.

The market within the Mediterranean is a bit quieter overall. In particular, there has been very little movement out of the Black Sea and East Mediterranean. Even the West Mediterranean has not been on form. A number of base oil cargoes have been booked from the West Mediterranean, but the number of new requirements has thinned. Shipment of 5,000 tons of base oils was fixed from West Mediterranean to Turkey at a very competitive $30/t, for example.

Transatlantic westbound shipments have been all about paraxylene, small parcels of base oil, the occasional cargo of urea ammonia nitrate and sulphuric acid, and very little else. Rates have edged down slightly. Levels on the 5,000-ton parcels of paraxylene to Mexico are in the mid $40s/t, which is not great, but perhaps higher than some were expecting the requirements to fetch.

Owners with ships to the Far East on berth in May are growing increasingly concerned about the lack of business. The odd parcel of base oil or acrylonitrile has been noted and some styrene was fixed, but otherwise there is little else to offer on. Rates are holding notionally, simply because they have not been properly tested.

Scheduled space to India and the Middle East Gulf remains scarce, keeping rates solid. However, even demand for small parcels of aromatics is a little less this week, although that could perhaps be a function of the shortage of sailings. There has been some base oil activity, with 6,000 tons fixed from Spain to Mumbai, and a cargo of around 5,000-6,000 tons from the Black Sea was heard to have fixed into the United Arab Emirates for around $66/t, which is a lowball freight.

Asia

There are quite contradictory views regarding domestic Asia trades. Some have felt that certain routes have picked up, whereas others contest that the entire region is quiet. Usually, the tonnage situation is a good marker, but even here there are contrasting pictures. Some owners have booked their ships almost through the entire month of May, whereas others are still showing space for the end of April. It is not entirely due to trading patterns, or even contractual business.

Owners outlooks tend to be negative, and whatever freight has been achieved is never satisfactory. Those who do manage to achieve levels that are above the market are reminded to keep the levels under wraps, while those who get lower-than-normal rates are often willing to grumble about it.

Overall this week, those who are dissatisfied with the market are louder than those who have something to be pleased about. For sure, the direction of rates is on a stable-to-weak tendency, and it will require a substantial injection of new business to cause a change in direction.

For now, the surplus of tonnage in Asia will likely undermine owners efforts to raise transpacific freight rates. There is a belief that benzene exports to the U.S. should restart at some point in order to protect domestic Asian prices, and as such, owners are quoting mid $40s/t for 6,000-ton parcels from Korea to Houston. However, very little benzene is being discussed currently. There are some cargoes of paraxylene to the U.S. Atlantic Coast, along with a bit of urea ammonia nitrate and sulphuric acid, but not really a lot else.

The market to Europe sees some small parcels of biodiesel, acrylates, acids, molasses and a bit of base oil. Base oils totalling 6,000 tons from Southeast Asia to Antwerp-Rotterdam-Amsterdam were fixed for May loading in the high $60s/t – up slightly from the mid $60s/t paid for the April requirement.

Things have been a bit busier on the India and the Middle East Gulf regional trades, but because both eastbound and westbound markets are slack, ships that would normally be running services back out to Asia or Europe are finding themselves taking the regional cargoes instead. For those able to trade with Iran, there have been quite a lot of opportunities, but as of yet, it has only been the usual carriers who have participated.

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 Bergen office in Norway, SSYs Ian Roberts can be reached at fix@ssychems.com or +47 55 54 05 00 and in Singapore Jordi Maymi at +65 6854 7127.