It has not exactly been a busy week on the route to the Far East. Products such as styrene failed to show. Evidently, supplies are tight in the U.S. Gulf in September and selling prices are too high to effect any transactions. Lower freight might help, temporarily, but then the whole game of cat and mouse between owner and charterers would restart. As it is, rates in the low $40s per metric ton are being tabled for 5,000-ton parcels – which might be just too low for owners who are relatively free from mass-scale competition this month, unlike they were in August. Ethanol and paraxylene are the other main grades being talked. Base oils are not in contention.

The eastbound transatlantic route is relatively tight on scheduled space, and a couple of outsiders have managed to jump on berth. Cargoes are not really mainstream commodities but are odd grades such as crude tall oil, molasses, UCOME and technical corn oil destined for outports, therefore warranting the attention of the outsiders. A caustic haul of 15,000 tons fixed from Freeport, Texas, to San Cyprian, Spain, at $40/t, putting the 5,000-ton rates from Houston to Rotterdam squarely in the low- to mid $50s/t. Base oils are having a quiet month on this route so far.

From a base oils perspective, it has been a fairly busy week on routes to the Caribbean. There is a requirement for 1,500- to 3,000-ton base oil movements into Rio Haina, Dominican Republic, and another for 4,700 tons into Cartagena, Colombia. Traders are also understood to be looking at supplying Balboa, Panama, with 1,800 – 2,000 tons. With all the other parcels of caustic, ethanol, aromatics, solvents, vegetable oil and tallow around, this is not too bad of a trading area right now.

Ethanol is pretty active southbound into Brazil, and there has been some spot fixing of methanol, caustic and acetone as well. Base oils in the amount of 5,700 tons were worked from the U.S. Gulf to Brazil in the low $50s/t. Nothing major has occurred to change freight rates so far.

Space on scheduled carriers to India and the Middle East Gulf is quite tight for September, which has permitted an outsider to allegedly come on berth and fix some ethanol and base oils. Rates for 5,000-ton parcels from Houston to Mumbai, India, are currently in the high $70s/t.

Europe

The pace in the North Sea and Baltic Sea region once again has eased up now that we are in the new month. Base oils are one the more upbeat products, with shipments both into and out of the Baltic this week. Generally speaking, however, owners feel that demand is unsatisfactory and prompt space could accumulate.

It has not been one of the brighter weeks for southbound trade into the Mediterranean. Biodiesel has probably provided the most business, and there have been some MTBE shipments, as well as styrene, orthoxylene and ethylene dichloride.

A few cargoes heading northbound, such as urea ammonia nitrate from Egypt, wax from Italy and glycerine from Spain managed to fix pretty quickly, whereas some other parcels, such as benzene from Skikda, Algeria, toluene from Priolo, Italy, and benzene from Sarroch, Italy, took a while longer to cover. Base oils are mostly routine at this stage, although a shipment of nearly 6,000 tons was booked from the Black Sea to Antwerp-Rotterdam-Amsterdam.

Inter-Mediterranean demand has still not got going and there is now quite a sizeable list of ships open within a weeks time. Rates continue to droop, with routine cargoes in the western part of the Mediterranean losing around another 1.00/t. Base oils have continued to move into Turkey and North Africa.

The transatlantic route has come tantalizingly close to bursting into life on several occasions over the past week – but each time, the arbitrage window has closed, leaving the same ships to scrabble around for the cargoes that are firm. Pyrolysis gasoline was one such commodity, benzene another. Toluene has started to make noises very recently, and there may still be further shipments of paraxylene. A cargo containing 12,000 tons of sulphuric from Hamburg, Germany, to the U.S. Gulf concluded in the mid $20s/t, while 9,000 tons of FAME Hamburg to New Haven, Connecticut, U.S., paid around $29/t.

There has been minimal activity on trade to the Far East, causing rates to sag. Parcels of 5,000 tons from Rotterdam, the Netherlands, to Mainport Far East are probably now bookable for less than $70/t. Having said that, a couple of requirements that have been around, including the rubber process oils from Hamburg, have yet to get fixed.

It has not been particularly busy on routes to India and the Middle East Gulf this week, and there are several ships with space. However, there are also cargoes outstanding, including some base oils, phosphoric acid, acrylonitrile, hexane, acetates. There are also assorted packages of aromatics, which include toluene, solvent naphtha and solvent naphtha C9. Cargoes of base oils are believed to have been fixed this week from both the Baltic region and the Black Sea.

Asia

The tight space situation in Northeast Asia has persisted, but has been inflated artificially by berthing delays in both Korea and China. With the G20 summit in China winding up, it is expected that there will be an increase in demand from those factories forced to close for the duration of the event, which could then see a period of further congestion. Northbound also enjoyed a better spell of demand, especially with methanol and aromatics, but also some base oils. Traffic has been rather light on the other domestic Asian routes.

September space remains limited on the transpacific route. Mixed xylenes in the amount of 15,000 tons was done from Korea to the U.S. Gulf in the low $30s and a number of benzene cargoes have been booked in the U.S. Gulf for around $39/t-$40/t. Urea ammonia nitrate in the amount of 25,000 tons loaded in Lanshan, China, this week for the U.S. west coast at a rate said to be $33/t. Small parcels on the Asia-to-Europe service continue to pay good money, according to an owner who has scheduled several such sailings. The ships may not be full but the net result is superior to taking some of the commodity chemicals or palm oils.

It has been a busier week on the regional markets in India and the Middle East Gulf, with quite a lot of material booked to and from India. Base oils continue to be seen from the Red Sea but Iranian material is less visible. Eastbound demand has eased this week, and space seems to be more plentiful. Westbound has also been pretty quiet and rates remain under pressure all through the region.

Adrian Brown is a senior market analyst for chemicals and base oils with SSY Shipbrokers, London, can be reached at fix@ssychems.com or +44 12 0750 7507. Information about SSY can be found at www.ssyonline.com. In the Houston office, Panos Giannoulis of SSY’s Chemical Tanker Department can be reached directly at panos@ssychems.com or +1 (713) 652-270 and Jordi Maymi in Singapore can be reached at +65 6854 7127.