It has not been a good week for ship owners who service the route to Far East, with almost all the regular products failing to materialize. Styrene traders had another frustrating week, with prices tracking softer crude oil prices. Buyers in Asia inevitably held back in the anticipation of even lower levels. Paraxylene arbitrage failed to open, with the only requirements noted being for oil majors.

Ethylene dichloride saw unfavorable pricing in Northeast Asia and although one fixture of 10,000 tons was made to northern China in the high $60s per metric ton, it appears difficult to conclude any new sales.

Acrylonitrile, another regular product, is in extremely short supply in the U.S. Gulf. On a positive note, methanol has seen some movement to Asia and there is speculation that ethanol might join it. There is quite a bit of tonnage open in the U.S. Gulf in May, and the lack of firm business is preying on ship owners freight ideas. Parcels of around 5,000 tons are now achievable to Mainport Far East in the very low $50s/t. Freight is not the main issue, however. It could be $20/t and some of these products would still have difficulty moving.

Transatlantic business has been slow. No styrene has come to light. Instead, 10,000 tons of cumene was fixed from the U.S. Gulf to Antwerp-Rotterdam-Amsterdam in the mid $40s/t, and then split into two different sailings. A haul of 5,000 tons of vinyl acetate monomer was booked from Houston to Antwerp and 3,000 tons from the Middle East Gulf was rumored to have been fixed from the U.S. Gulf to Antwerp-Rotterdam-Amsterdam. Biodiesel in the amount of 4,000-5,000 tons concluded from Norfolk, U.S., to the United Kingdom. Base oil is confined to routine, in-house shipments.

It has been quieter in the Caribbean in general. Base oils, in the amount of 1,500 tons, are still quoted from Houston to Rio Haina, Puerto Rico, for loading in May, and 2,500 tons base oils are looking for a prompt shipment from the U.S. Gulf to Cartagena, Colombia. However, many of the small chemicals parcels are yet to materialize or have tenders awarded, which might cause freight numbers to wilt.

There are some inexplicable things happening on the route to the east coast of South America. Paraxylene totalling around 10,000 tons from the U.S. Gulf to Suape, Brazil, ended up going for $55/t. Rather bizarrely then, 3,450 tons of base oils from Houston to Santos, Brazil, were suggested to have been fixed on subjects at around $50/t. Ethanol is still very active, particularly since Brazilian ethanol producers have been lobbying their government to introduce import tariffs on U.S. ethanol. A decision should have been reached this week but has been postponed, so expect more last-minute ethanol fixing.

Ethanol has begun to appear on the enquiry lists into India and the Middle East Gulf again. Base oils have also been seen, with 8,000 tons reportedly booked on an outsider for May loading.

Europe

There have been mixed reactions about the weeks activity in the North Sea and Baltic region. Some owners found things too sedate, whereas others report that they have been able to cover their ships forward by at least 10 days. All will agree, however, that freight levels have become highly competitive. Base oils have been reasonably active, certainly compared to some chemical products. The impressive cargo of 15,000 tons of base oils from Riga, Latvia, to Rotterdam seems not to have fixed in its entirety, though.

On southbound routes, it has been a fairly busy week again, although some potential deals failed to materialize, perhaps because of uncertainty over commodity pricing. Base oils in this direction have been primarily the preserve of oil majors. Other commodities that have seen action this week include paraxylene, acrylonitrile, urea ammonia nitrate, caustic, MTBE, styrene, biodiesel and ethanol.

Northbound demand has been rather subdued and some owners have been quick to adjust their freight ideas downwards. Caustic amounting to 5,000 tons from the western area of the Mediterranean to Continental Europe is understood to have gone in the mid- to high 20s/t, for example. A little bit of base oil activity has occurred, with movements from Spain and Greece reported.

Inter-Mediterranean trade felt sleepy at times this week, especially early on. However, there must have been a reasonable amount of firm business, because quite a large number of ships are now posted as being occupied for the next 10 to 14 days, with a few even only able to look at June cargoes.

Base oils have been one of the busier commodities again. Italys Livorno port, for example, has a ship scheduled to load every 4 to 5 days for the rest of the month. Cartagena also has been churning out cargoes to the extent that the ships are almost following each other in a procession across the Mediterranean. Caustic, biodiesel, methanol and vegetable oil are perhaps the other active grades.

It has been another slow week westbound. Paraxylene still has potential. Pyrolysis gasoline was quoted from Immingham, England, and from Italy, although the Italian cargo was eventually sold locally. A 3,500-ton acetone consignment was quoted from Antwerp-Rotterdam-Amsterdam to the U.S. Gulf and a small cargo of reformate was shown around. A parcel of base oils was mentioned for a Rotterdam to Houston shipment and some sulphuric acid was quoted out of the Baltic, though only for shipment in the first half of June. Rates are just a bit lower again this week, with 5,000-ton parcels discussed in the mid- to high $30s/t.

Chemicals activity to the Far East is sporadic, and while contractual demand is mostly stable, there is some part-cargo space available and unless demand does pick up soon, rates may start to buckle under the pressure. Base oils are again being contemplated to Singapore from Antwerp-Rotterdam-Amsterdam and Italy. The 10,000-ton parcel fixed last week from the Black Sea to Singapore is understood to have gone in the mid $90s/t.

A couple of additional vessels to India and the Middle East Gulf have managed to squeeze on berth in May, but still have part-cargo space to fill. Rates could weaken since fewer parcels are being quoted in this direction right now. A parcel of base oils is being studied from the Mediterranean into Aqaba, Jordan.

Asia

In regional trade, business has been held back by the number of holidays within Asia, and very little fixing has occurred to really test the rates. Next week shall see the start of the Asia Petrochemical Industry Conference in Singapore, which will likely be another reason for a lack of trades. In general, there is a lot of open tonnage within the region and it is likely that owners will be unable to resist charterers determined downwards pressure on rates. Perhaps it would be more favorable if clean petroleum had been stronger and palm oils more active. But since they offer little support, the collective demand is unlikely to provide enough employment for all the vessels in the region.

Benzene has made an appearance of sorts on the transpacific export route, thanks to substantial decreases in Asian prices. However, it did not take long for U.S. prices to decrease too, cutting off the arbitrage. A few traders have been talking about orthoxylene and mixed xylenes to the U.S., and 6,000 tons of toluene is believed to have fixed from Taiwan to the U.S. Gulf. Alkylate amounting to 15,000 tons has just been booked into the U.S.s western coast, which leaves plenty of space on that route.

The market into Europe is felt to be mostly unchanged. Chemical space is tight from Southeast Asia, but there are a number of palm oil carriers that can provide cheap space for parcels. One thousand tons of acetone just concluded from Korea to Gebze, Turkey, at $180/t, but there are some cheaper numbers obtainable too.

The India and the Middle East Gulf regional market seems to be calm, but this does not mean that it is simple to fix small parcels within the region. A number of major charterers have been struggling for some time to get things covered, sometimes at incredibly high freight levels. Berthing delays are so commonplace and lengthy that cargoes can be fixed several times over and still not be loaded on the correct dates.

Eastbound is slow and rates are subdued. Paraxylene in the amount of 10,000 tons from the Middle East Gulf to Far East paid mid $40s/t, for example.

Westbound is tighter on space, with many of the small ships having fixed away. Base oils equalling 4,000 tons were reportedly fixed from India to Turkey, and there have been some freight enquiries to ship Iranian base oils to Turkey as well.

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.