Routes to the Far East had another amazing week. Methanol has been extremely active to Asia from the Caribbean and the U.S. Gulf, and since many of these requirements are between 20,000 and 40,000 metric tons, they have virtually depleted the entire stock of spare chemical carriers in the U.S. Gulf in February and March.

Consequently, we have seen ships encouraged to ballast all the way from Asia and even the Middle East back to the U.S. Gulf. Rates for these cargoes have risen in just a few weeks from mid $50s per metric ton to mid $60s/t, with some owners believing they might be able to milk even more out of it.

In addition to methanol, there have been all the usual requirements to Asia – ethanol, styrene, phenol, etc. – but since scheduled space is now all gone until April, there is really not that much that can be accomplished. Traders continue to look at ways that they can ship base oils from Paulsboro, New Jersey, to India, Singapore or China, but the lack of space is a big disadvantage.

The drain on open space to supply the U.S. Gulf-to-Far East route is also having an impact on the transatlantic market, causing rates to strengthen. A 6,000-ton cargo of acetic acid was booked from Houston to Antwerp-Rotterdam-Amsterdam at $77/t, for instance, in comparison to recent deals that have been in the mid $50s/t. Another vessel took 6,000 tons of phenol from Freeport, Bahamas, to Antwerp-Rotterdam-Amsterdam at levels that are reputed to be in the low $70s/t. Demand for space is strong, and there are requirements for many different products, although base oils is not one of them.

Trade to India and the Middle East Gulf remains stable. Prompt space can be found, but there is also reasonable demand, with parcels of ethanol, methanol, caustic and ethylene dichloride quoted.

Routes to the Caribbean continue to display a reasonable level of activity with plenty of small parcels of chemicals, vegetable oil and clean petroleum seen in the area. Base oils are still being quoted into Rio Haina, Dominican Republic. Fog has started to become an irritant on this route, closing the Houston Ship Channel on a number of occasions over the past week. Due to the short turnaround times on most of the U.S. Gulf to Mexico-Caribbean voyages, bad weather can soon start to impede and cause delays, although so far it has not been too noticeable.

Activity to the east coast of South America remains pretty quiet. Ethanol is one of the main commodities being quoted into Brazil, along with caustic and small parcels of clean petroleum. There is adequate space on scheduled tonnage for most possibilities.

Europe

Contractual volumes in the North Sea and Baltic region have been decent, according to owners, but spot demand has been patchy. Some vessels are employed quite well into February, but a number are still open in prompt positions. Base oils continue to be shipped down from the Baltic, although admittedly in less quantity than a few weeks ago. Rates from areas where there is ice, such as Hamina, Finland, are starting to increase, with 3,000-ton parcels to Antwerp-Rotterdam-Amsterdam fetching close to 32/t.

The majority of prompt southbound positions were successfully covered during the week, but the amount of spot market demand has been rather patchy. Some base oils were quoted into Turkey and Egypt by majors.

In northbound trade, attempts have been made to book 6,000 tons of base oils from the Kavkaz region up to Antwerp-Rotterdam-Amsterdam, and the usual cargoes out of Augusta, Italy – a route on which rates have been trending lower recently. The chemicals market is otherwise not that busy.

It has been pretty busy again on Inter-Mediterranean routes. Prompt space has been extremely scarce in the West Mediterranean, often with only one or two candidates per cargo. Rates have been firm but not outrageous. A benzene cargo of 3,000 tons from Lavera, France, to Porto Marghera, Italy, was heard fixed at 40/t, for instance. Base oils have been active in the usual hotspots – Turkey, Egypt and Morocco.

It has not been a particularly lively period for westbound transatlantic traffic, although there is not that much space around and consequently rates are not under much pressure. A 10,000-ton haul of paraxylene from Rotterdam to the U.S. Atlantic Coast fetched $33/t, whereas 8,500 tons of mixed chemicals from Rotterdam and Antwerp to Houston and Mississippi were apparently done in the $70s/t. Some benzene has been tentatively quoted from Antwerp-Rotterdam-Amsterdam to the U.S. Gulf, and caustic too for a while, although traders are having difficulty making the caustic work. Base oils are quiet in this direction.

Further improvement in demand from the Far East has been recorded since last week. Methanol has been fixed to China, which is surprising, given that Europe is importing methanol currently. Some base oil interest has been noted, but nothing has been fixed so far. Other products looking to move include ETBE, acetone, MDI, oxo-alcohols, styrene, orthoxylene, paraxylene, mixed xylenes and ethylene dichloride.

Traders have been checking freight levels on base oils into the Middle East Gulf, but space is quite tight currently and owners are talking in terms of $80s/t and $90s/t for 2,000-3,000-ton parcels, which has yet to cement any deals. There are plenty of small parcels of chemicals being quoted and owners are confident they will be able to achieve their freight ideas.

Asia

The increased demand in domestic Asia markets observed in the previous week continued right up until the onset of the Chinese New Year celebrations, thereby covering almost all the prompt ships. A reasonable number of owners further report that they have little space available for the remainder of February in the main trading areas of Northeast Asia. Rates have increased, especially from Korea to China, with some 5,000-ton parcels paying even into the low $20s/t, compared to the week before when they were still commanding around $15/t. Base oils were busy until the last moment, and then there have been a number of requirements that have still to be fixed after the holidays.

Transpacific export routes, while not seeing many new benzene requirements, seem to have stabilized. Since last weeks report, the traders who started off looking to force levels down to the high $20s/t ended up conceding rates in the low $40s/t for 18,000 tons of benzene from Korea to the U.S. Gulf. The route to Europe has been rather staid and there is still some open space, keeping rates soft.

Trades to India and the Middle East Gulf region have not been a complete washout, and instead a reasonable level of demand has been detected. A number of cargoes have been pushed around for a couple of weeks too without getting fixed. Base oils are being shipped from the Middle East Gulf into India.

Fewer of the large eastbound requirements remain, and instead there are just a handful of cargoes in the 5,000-10,000-ton size. Rates are very mixed, however. Easy chemicals in the amount of 10,000 tons from Al Jubail, Saudi Arabia, to Singapore were suggested to have gone in the low $30s/t, whereas 5,000 tons to Thailand were mentioned in the $50s/t, and 4,500 tons of aromatics from the Middle East Gulf to Korea fixed in the high $70s/t.

Westbound rates have stabilized even though demand has not particularly increased. The usual aromatics cargoes have been noted and there has been a growing number of enquiries out of Iran, including base oils – although few of these, if any, have been fixed.

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.