There has not been a substantial amount of spot cargo fixed to the Far East this month, which some interpret as the market quietening down. Perhaps another way to look at it would be to realize that there is not that much bookable March space to start with, which then acts a limit on the amount of fixtures to be reported. Consequently, rates are notional. Some argue that 5,000-ton parcels to China should command rates in the low $60s per metric ton, but this has yet to be tested.

In the meantime, a couple of additional ships have been lured on berth, one with a vegetable oil cargo to Korea and the other with a base oil shipment to Singapore. The rate on the base oil is reported as somewhere between mid $80s/t and low $90s/t for 13,000 tons, which reflects the premium that an owner would seek for March loading. There are further base oil enquiries to China and to Merak, Indonesia, as well as chemicals cargoes such as ethanol, ethylene dichloride, phenol and paraxylene.

There was a period over the past fortnight when rates dropped away substantially on the eastbound transatlantic route, but contractual demand has since kicked in, and the amount of open space has balanced closer to the amount of cargo demand. Base oils are not that active on the spot market, but regular shipments provide some insight into freight levels, with 7,000 tons fixed from the U.S. Gulf to Naples, Italy, in the mid- to high $80s/t, which is up on previous movements. Cumene in the amount of 5,000 tons from the U.S. Gulf to Antwerp-Rotterdam-Amsterdam was fixed in the very low $50s/t, showing what mainstream levels are like.

There are certainly a couple of ships of about 13,000 dwt fully open in the Caribbean, but much of the business here is small and favors an owner who is on berth with a contractual delivery and looking to fill out the ship. Base oils have been noted, with 1,500 tons claimed to have fixed from the U.S. Gulf to Rio Haina, Dominican Republic, and another 1,500 tons covered from the U.S. Gulf to Mexico. An 8,500-ton cargo of vegetable oil from Norfolk, U.S., to Rio Haina fetched a rate in the low $30s/t, which is probably less than a similar base oil shipment from Paulsboro, U.S., would achieve.

Yet more ethanol has been booked into Brazil, with further requirements still pending. Rates have been fairly strong as a result, which has made it tricky to ship some of the base oil. Two-thousand tons of base oils were said to have fixed to Santos, Brazil, but a larger requirement of over 6,000 tons has been harder to cover. Acetone – 1,500 tons of which going from the U.S. Gulf to Aratu, Brazil – was reported fixed at $75/t, which is a lot lower than normal, but could be useful as a pointer for levels for some of the smaller lots.

Ethanol is one of the major cargoes on the route to India and the Middle East Gulf, and it is conceivable that once an owner takes a 30,000-ton slug of ethanol they might be able to offer more attractive rates to charterers wanting to fill out the ship with small parcels of no-heat base oils. Rates are otherwise in the mid- to high $70s/t for 5,000-ton cargoes from Houston.

Europe

There has been a fairly heavy stream of base oils fixed out of the Baltic region over the past couple of weeks with yet more enquiries pending. Most have been from Latvian ports of Riga and Liepaja and Kaliningrad, Russia, with only Kaliningrad facing ice of any great magnitude. All the same, owners of non-ice-class tonnage remain wary as March is often the month when ice develops the most. Spot base oil activity has also been detected from northwestern Europe, but rates are largely stable. Most ships have at least a weeks forward employment, but there are inevitably some stragglers.

The bedrock of the southbound route is usually FAME, but there have not been that many smaller lots. Consequently, there has been a bit more space into the West Mediterranean and rates have weakened slightly. Cargoes of styrene, paraxylene, ethylene dichloride, acrylonitrile and base oils have been noted heading into the eastern Mediterranean, which have kept rates stable.

Levels have been quite strong on some pieces of northbound business. It seems there is not a great deal of open space, with some regular owners not even in position so far this month. Aromatics in the amount of 6,000 tons from Priolo, Italy, to Antwerp-Rotterdam-Amsterdam fixed at around 50/t, which is much higher than usual. Styrene shipment of 5,000 tons from Tarragona, Spain, to Rotterdam achieved 157,000, which is also higher than usual. Base oil activity has been minimal, apart from the regular shuttling of cargoes from Leixoes, Portugal, where the larger jetty is still unavailable for base oil cargoes.

There is not a great deal of prompt open space in either the western Mediterranean nor in the Black Sea, yet rates remain range-bound as owners seem nervous about pushing for increases. Base oils have been detected moving out from the Black Sea, as well as the more normal shipments from Greece, Italy and Spain. A small shipment of base oil was noted making its way into Varna, Bulgaria, from Haifa, Israel. Vegetable oil demand is fairly strong at present, keeping a lot of potential base oil carriers out of the market.

Westbound transatlantic demand remains varied, and scheduled carriers are pretty busy, which has in turn allowed some outsiders to go on berth. Cargoes such as paraxylene, MTBE, caustic, sulphuric acid and pyrolysis gasoline have filled much of the space. Rates are generally holding in the low $40s/t for 5,000-ton cargoes, and between 5,000 and 6,000 tons of base oils from Rotterdam, the Netherlands, to Houston, U.S., were reported to have been worked in the $40s/t. Further base oils have been seen from Italy to the U.S. Gulf.

There is not much March space remaining on Far East routes, and owners are intent on holding their ground. Fewer base oil requirements have been noted, and instead there are chemicals such as methylene diphenyl diisocyanate, adiponitrile and acrylonitrile, all of which pay strong levels.

Interest in sending base oils to India and the Middle East Gulf is still evident, with a selection of cargoes quoted. Chemicals demand is also strong, with numerous requirements and strong rates. Owners are generally looking for levels in the $80s and $90s/t for 5,000-ton parcels.

Asia

Basic demand seems to be sufficiently strong to allow the majority of owners to build a buffer of 1-2 weeks employment before having to book the next cargo. A few April positions have sprung up, but these are the exception. Rates are therefore balanced, neither falling nor rising. Intra-Far East demand is perhaps the strongest, with all the usual shipments of paraxylene, benzene, toluene and clean petroleum, but there are warning signs that China may have imported too much material such as glycol, styrene and MTBE and some of these cargoes are being offered for resale from bonded storage. From a shipping angle of course, owners are delighted as it offers them a potential backhaul. Base oils have been busy throughout the region, and with further base oil refinery turnarounds scheduled in Asia over the next couple of months, there could well be more movements of base oil from unexpected sources.

Business has been slower on the transpacific route, with benzene remaining resolutely flat and unworkable. Some styrene and other aromatics have been discussed for trade to the U.S. Gulf, the rates for which have seen levels dip from the mid $40s/t to the low- to mid $40s/t.

The market to Europe is fairly robust and a lot of scheduled and unscheduled tonnage has been booked already for March shipment. Styrene, glycols, biodiesel, vinyl acetate monomer, acetates and cyclohexane have been noted. Owners are seeking levels in the $80s and $90s/t for 5,000-ton parcels. An attempt was made to ship a small lot of base oils from Singapore to Rotterdam, but with rate ideas in the $50s/t, it would have needed a desperate owner to take it. With rates out of India, the Middle East Gulf and the Red Sea being higher than this, most owners would elect to take their chances.

It feels as though slightly less material is looking to move on the regional India and the Middle East Gulf markets, judging from the number of fresh requirements. At the same time, ships are generally filling out and there is not much evidence of vessels remaining idle. Base oils are still pretty active from Al Ruwais, U.A.E., but fewer Iranian base oil cargoes have been spotted.

Demand seems to have subsided a little on the eastbound markets, yet rates are holding. Base oils in the amount of 4,000 tons from the Red Sea to Nantong, China, were fixed in the $80s/t, for example.

Westbound looks to be unchanged. Scheduled carriers have pockets of space left, and there are a number of smaller outsiders around. Styrene is the latest cargo to be seen on this route.

Adrian Brown is a senior market analyst for chemicals and base oils with SSY Shipbrokers, London, can be reached atfix@ssychems.comor +44 12 0750 7507. Information about SSY can be found atwww.ssyonline.com. In the Houston office,Steve Rosenthalof SSY’s Chemical Tanker Department can be reached directly at +1 (713) 652-2700 and Jordi Maymi in Singapore can be reached at +65 6854-7127.