U.S. Gulf-to-Europe cargo volumes multiplied throughout the week, causing January space to rapidly diminish. Ethanol to the United Kingdom, the Baltic and Antwerp-Rotterdam-Amsterdam was among the flood of cargoes, along with some styrene, corn oil, cumene, lysine, isopropanol, monoethylene glycol, and phenol.

A couple of traders were studying 3,000-ton parcels of base oils to Havre, France, and Antwerp-Rotterdam-Amsterdam, where freight levels could easily be in the high $60s per metric ton.

This week produced even more new business to the Far East than last week, and it has now become really difficult to find any January space.

Those ships that do have space are certainly not cheap, wanting rates in the mid $80s/t for 5,000 tons. A more usual level would be mid $70s/t, and this figure is still achievable for February business. In effect, the $10/t difference is the premium that is chargeable for those charterers who must have a January loading.

Base oils are invisible again, but anyway swamped by all the styrene and ethanol requirements out there.

Trade to the east coast of South America has picked up in the past week, although it is nothing too exceptional. There are cargoes of base oils, as well as plenty of caustic, some paraxylene, ethanol, acetone, chloroform, methanol, alkylate, styrene and urea ammonia nitrate. It is not a favored destination since there is not that much backhaul business out of South America presently, and the lack of competition among owners means that rates are holding up.

Several more base oil possibilities to the Caribbean appeared during the week, with requirements noted into Rio Haina, Dominican Republic, Cartagena, Colombia, and Punta Cardon, Venezuela. Most vessels are full for January, although there is the possibility that some of the outstanding ethanol or caustic could put more tonnage on berth.

On routes to the India/Middle East Gulf region, several larger lots of ethanol were pushed around this week, which could easily account for the remaining space this month.

Talk of base oils has persisted, but it is unlikely that rates will now soften further, especially as there are possible ethylene dichloride and acrylonitrile cargoes to be done. With rates for base oils therefore pegged at around $80/t for 5,000-ton parcels, it may be difficult to conclude the commercial side of the deal.

Europe

The North Sea and Baltic region was in better form over the past week, and almost all the ships that started off the year in prompt open positions managed to fix away. The standard at the moment seems to be between five and 10 days leeway before the ship becomes prompt again, which is close to the usual trading pattern in the area.

Base oils have continued to move down from the Baltic, alongside a couple of larger exports to West Africa. Rates are pretty steady in the region.

Due to public holidays in some Catholic and Orthodox countries last week, the amount of new southbound business was curtailed, but nonetheless there were some decent requirements quoted, such as cargoes of caustic, ethylene dichloride, paraxylene benzene, styrene, MTBE, ethanol and acrylonitrile, as well as some routine base oil movements. Rates look to be stable.

Several interesting northbound base oil shipments have come to light out of the Mediterranean, which is a route not normally associated with base oil. It may be due to an overhang of material that is being priced at attractive levels in order to shift it. The freight market in this direction is otherwise pretty routine.

In spite of the public holidays, prompt Inter-Mediterranean space had effectively disappeared by the end of the week. The West Mediterranean in particular has been busy again with biodiesel cargoes, and the constant demand for oil imports into Morocco has certainly been noticeable since a substantial number of ships are now occupied in serving this trade.

In the East Mediterranean, there does not seem to have been much more base oil this week, but instead there has been more methanol, caustic, vegetable oil and clean petroleum with which to keep the fleets busy.

Westbound transatlantic markets have been more active with a broader range of commodities quoted. Space is still obtainable on certain positions, but the immediate oversupply of tonnage has been slashed. Even some of the additional ships that were hoping to squeeze onto the route have fixed some spot business.

Cargoes of paraxylene, orthoxylene, toluene, mixed xylenes, sulphuric acid, calcium nitrate and caustic have been the main perpetrators. Rates are in the very low $40s/t for 5,000-ton parcels into the U.S. Gulf.

A little more business to the Far East has presented itself over the course of the week, but fundamentally the route is still weak and overloaded. A parcel of base oils is believed to have gone from mainland Europe to Asia, but otherwise the cargo lists reflect more the demand for products such as ethylene dichloride, orthoxylene, paraxylene, cumene, oxo-alcohols and acrylonitrile.

Rates have slipped slightly, with 5,000-ton parcels from Rotterdam to China offered in the low $80s/t.

Owners have been fairly bullish on their freight ideas to India/Middle East Gulf this week, confident that demand is sufficiently strong for all the ships to fill. In some cases, rates in the mid $80s/t have been offered for 5,000-ton parcels to the west coast of India, which is a hike from previous rates in the mid $70s/t.

Ethylene dichloride, styrene, C9, hexane, pyrolysis gasoline, aromatics and oxo-alcohols are bolstering demand for space. Several base oil cargoes are destined for the area too.

Asia

A little more domestic Asia business firmed up through the course of the week, providing most ships with forwards employment of a week to 10 days, but there are still many instances of ships that are open in prompt positions.

Rates therefore remain under pressure. A 3,000-ton parcel of easy chemicals from Singapore to Mid China concluded in the low $40s/t, for example, but some charterers are convinced that they can achieve even lower numbers and are holding out for rates in the $30s/t.

There are reports too of 6,000 tons of easy chemicals going from Korea to Singapore in the very low $20s/t, when a more normal number would be some $10/t higher than that. Base oil movements have resumed to more regular levels after a seriously slow start to the year.

Asia export demand for benzene is ongoing on the transpacific routes, with yet more volumes lined up for February. Rates have surprisingly fallen, given the increased demand, but owners seem content to fix 12,000-ton parcels from Korea to the U.S. Gulf for around $40/t and 6,000 tons cargoes in the vicinity of $47/t-$49/t.

The market to Europe is very different. There are not so many scheduled ships with space which is keeping rates on an upwards track. The base oils that have been booked back to Europe, for example, have been paying in the $120s/t for 7,000-ton parcels. The chemicals grades tend to be in smaller lots, or else are larger lots of phosphoric acid or vinyl acetate monomer which are better-suited to stainless parcel carriers.

Palm oil rates into the west coast of India are said to be holding in the low $30s/t, and whilst demand is reckoned to be low, there is nevertheless a sizeable number of ships due into India, Pakistan and Bangladesh. Deep-sea demand is deemed to be slack and rates in the $50s have been achieved back into Europe.

The Middle East Gulf/India region has been a little busier, but many of the requirements are for cargoes of clean petroleum in the 10,000-15,000 tons size, or else they have been smaller lots in the 2,000-3,000 tons size, which are suitable for the last tanks on a ship but it is hard to fill up a ship this way.

Base oil activity has been moderate, with a couple of Iranian movements and a couple of shipments in and out of the Red Sea.

Not so many bigger slugs of eastbound material have been encountered this week, keeping rates under downward pressure. Indian suppliers have been steadily exporting cargoes of paraxylene, orthoxylene, benzene, MTBE and pyrolysis gasoline, although a scheduled shutdown at the Mangalore facility later in the month will affect this trade.

Berthing delays in Al Jubail, Saudi Arabia, are still costing 5-7 days per ship, whereas delays in Kandla, India, have reduced to just 3 days.

Westbound rates are also soft for cargoes back to Europe, at least for larger cargoes of 5,000 tons or more. Smaller grades, such as vinyl acetate monomer, ethyl acetate, acetic acid, linear alkyl benzene, glycols and ethanol are not affected to the same extent.

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.