Routes to the Far East have seen a lot more activity, which is to be expected in the fourth quarter. Styrene had been at the top of the list, but a fire at Westlake Chemicals’ petrochemical plant in Westlake, Louisiana, late last week curbed plans to ship styrene. Ethanol has also been a primary product, with ethylene dichloride, phenol and glycol also present. Paraxylene is also workable. Owners are still seeking numbers in the $50s per metric ton for 5,000-ton quantities from Houston to Korea, but charterers are reluctant to pay above the levels done in September, especially as there are still a few October positions around. The only base oil cargo heard has been a small lot of around 4,000 tons to Singapore, which paid in the low $80s/t.

Many of the transatlantic cargoes that had been in the pipeline to Europe simply failed to materialize, causing concern among owners with prompt space. Cumene in the amount of 6,000 tons from Pasadena, U.S., to Antwerp, the Netherlands, is rumoured to have gone in the high $30s/t, although some suggest it was still in the low $40s/t, but all the same, the rate is a lot lower than the $50s/t that have been routine for some time. That ship is believed to have picked up 4,000 tons of base oils from Houston and Lake Charles to Havre, France, which along with the recent enquiry to ship 6,000 tons from Houston, and another larger lot from another port in Texas, demonstrates that there is still interest to move some grades of base oil to Europe.

U.S.-to-Caribbean is one of the routes that has swung towards greater activity, with a number of tenders being placed to ship products such as ethanol, caustic, toluene and acetone. There has also been a tender to ship 5,300 tons of base oils into Cartagena, Colombia, for mid-November delivery, and a ship has already been fixed to perform this shipment from the U.S. Gulf.

Ethanol is top of the list when it comes to southbound cargoes. At least three, maybe four such cargoes have been booked recently, with levels ranging from the high $30s to mid $40s/t. Some paraxylene is also being studied, as well as small lots of acetone and butanols, but no obvious base oils so far.

Demand is sustained on the route to India and the Middle East Gulf. Some big lots of ethanol have started to move to both India and the Middle East Gulf. Rates are pretty steady for now, even for small parcels such as base oil.

Europe

The amount of spot business has been rather disappointing in the North Sea and Baltic region, though frankly, there is not a massive amount of open space. Contracts have for the most part kept owners going. Ethanol has been one of the better performers, with numerous small requirements as well as some larger ones over 10,000 tons. A number of other fuels-related products have been active too, which is a little uncommon for this period of October. Base oils have been a little quieter out of the Baltic.

It has been a week of extremes on the southbound route. In one instance, 10,000 tons of biodiesel from Antwerp-Rotterdam-Amsterdam to southern Spain paid barely $12/t, yet 5,500 tons of ETBE, also to southern Spain, cost 30/t. Both ships were on prompt dates. Both rates seem extreme, and show how difficult it can be trying to estimate rates at the moment. A trader was attempting to place 6,000 tons of glycol into Turkey and had in mind to pay mid- to high $30s/t, basis 2 to 2. The actual level is not the hard point, but it is the stringent wallwash test, the last cargo history, the stern line required, the outports involved and all the finer points beyond the dollars and cents that add to the costs for an owner and therefore determine whether such a cargo is worth taking.

Flushed with their success at shipping 12,000 tons of base oils from Augusta, Sicily, to Rotterdam at $20/t, the charterers have come back and are now trying to secure prices in the high $20s/t for 6,000 tons to Port Jerome, France, and to Rotterdam. To put that into context, there was a fixture of 5,500 tons of easy chemicals from Sarroch, Italy, and Augusta to United Kingdom ports of Birkenhead and Dagenham and to Antwerp at 47/t. Two 6,000-ton cargoes of aromatics and pyrolysis gasoline were booked from Priolo, Italy, which is adjacent to Augusta, back to Antwerp-Rotterdam-Amsterdam at 37/t and 39/t, all of which amply demonstrate the turmoil in the market at the moment.

Not for the first time this week have there been complaints from charterers about locating prompt space within the West Mediterranean, yet owners are too nervous to seek higher freights. So far, charterers have been able to defer shipments slightly and the moment has passed. Should the tightness persist, freights will be affected, but clearly the volume of demand is not that strong and established freight levels continue to apply. Base oils have been a little more active, with a cargo moving from Spain to Egypt and another lot from Italy going to Tunisia and Morocco. There looks to have been some movements from Kavkaz, Russia, in the Black Sea as well.

The problem of failing arbitrage continues to haunt the westbound transatlantic route. Pyrolysis gasoline caused some excitement, and 6,000-10,000 tons were worked in the mid $20s/t, only to fail at the last minute. A further 8,000 tons of pyrolysis gasoline from Fawley, U.K., to the U.S. Gulf saw plenty of offers ranging from the low $30s/t to low $40s/t. It would be incorrect to say the market is quiet, and there have been quite a lot of fixtures over the past week, but the oversupply of vessel space persists and most of the freight levels have been soft. The occasional small lot of base oils has been attempted, but theres been nothing too exceptional otherwise.

Traders are at least trying to make things happen in the Far East direction. Styrene saw some activity and questions have been asked about methanol and phenol, even if nothing has materialized so far. Base oils in the amount of 4,000 tons were fixed from Antwerp to China, and 16,000 tons of phosphoric acid fixed from Tunisia to China. A number of specialist grades have been worked, including propylene oxide, adiponitrile, butanediol and octene. Rates remain in the $70s/t for 5,000-ton parcels going from Rotterdam to China.

Prompt space has also been tight on routes to India and the Middle East Gulf, and even finding a ship able to load in October has been a challenge. It has however not really been felt enough for most owners to seek higher numbers, although 3,000 tons of chemicals were fixed from Rotterdam to Al Jubail, Suadi Arabia, at $90/t, which represents an increase of $10/t-$20/t. Base oil traders continue to look at ways to ship material from the Mediterranean or the Baltic into India and the Middle East Gulf.

Asia

Almost all October space has gone on the intra-Far East routes for small parcels in the 3,000- to 6,000-tons size. Rates have increased slightly as a result, with 6,000-ton cargoes from Korea to mid China occasionally fetching very low $20s/t, though there have been many owners still in acceptance of levels of $17/t-$18/t. As the month-end approaches, there may be even more upwards pressure on rates since the clean petroleum market tends to move up a gear around this time.

Southbound is still generally slack, and while there is plenty of enquiry on the northbound route, rates are largely unchanged, with 3,000-ton parcels going from Singapore to mid China ending up in the low- to mid $30s/t. Base oils are pretty active on the shipping front, even if it is said that the trading side is supposedly quiet.

It has been quieter on the transpacific export route, with benzene only showing for November. However, the market to Europe has been busier and rates have been steadily climbing. A force majeure in Europe has prompted a huge rush of nitric acid from Korea, with 13,000 tons fixed to Antwerp at $79/t and a further 10,000 tons done at $82/t, with yet further enquiries noted through November. Other kinds of acids, acrylates, acetates and monomers have also been busy filling space, especially into the Mediterranean. Biodiesel continues to soak up tonnage, with another 10,000 tons fixed from South China in the high $60s/t. Base oils in the amount of 6,000 tons were booked from Ulsan, South Korea, to Adabiya, Egypt, and to Antwerp in the low $80s/t. Base oils in the amount of10,000 tons were also quoted from Daesan, Korea, to Antwerp-Rotterdam-Amsterdam.

Around India and the Middle East Gulf, demand has been stronger in the regional markets, and prompt space has become tighter. In some cases, charterers have been willing to pay slightly more for the usual small parcels. Eastbound volumes are steady, if unspectacular. Cargoes of styrene, MTBE, glycol, ethylene dichloride, linear alkyl benzene, acetone, paraxylene, orthoxylene and benzene have been noted. There is also growing interest in methanol into China.

Westbound has not been particularly busy and there is some October space around, although most of the smaller Mediterranean-based vessels have now fixed away. Traders are again looking at 8,000 tons of base oils from Ruwais, U.A.E., to Havre, although there are others who want to send the end of October cargo to India or Korea instead.

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.