Some owners seem unconvinced that demand will pick up along the route into the Far East, and those who have space left to fill for the end of May or early June are willing to cut their freight ideas even further. We heard of one owner who was willing to accept $45 per metric ton for 5,000 tons of styrene from the U.S. Gulf to Mainport, Far East. That particular deal failed, but that level has become the new target for other traders.

Owners whose ships have a little more leeway are inclined to draw the line in the sand in the $50s/t range for these kinds of cargo, hoping that the cheap ships will fill in the meantime. Styrene ought to be the main commodity, along with possible methanol, ethylene dichloride and ethanol opportunities, but traders in these product groups are having difficulty confirming sales, which may leave owners stranded. A cargo of 7,000 tons of base oils is looking for space from the U.S. Gulf to Singapore, but owners would like to see a few more similar such cargoes to ease their woes.

Freight levels are drifting downwards on the eastbound route. Firm demand is thin. Styrene is talked to Antwerp-Rotterdam-Amsterdam and the Mediterranean. More cargoes of cumene and vinyl acetate monomer have been booked, and ethanol is starting to appear more frequently. Base oil traffic is minimal though.

It has not been a fantastic week in the Caribbean trade. Some of the requirements from last week and the week before are still around, but are taking a long time to firm up, including some of the base oils. Vessel space is not an issue since there are quite a few ships around, although some might be better off running with vegetable oil due to less strict vetting policies.

Ethanol is still the principal commodity being shipped southbound to the east coast of South America. Styrene has also been worked into Brazil and there is a tender to buy 13,000 tons of ethylene dichloride from buyers in Maceio, Brazil. No further base oils have been seen, following reports that the parcel of 3,450 tons to Santos, Brazil, lifted subjects in the high $50s/t.

Base oils have quietened substantially on the route into India and the Middle East, and there is now even doubt if the recent fixture of 8,000 tons to Mumbai, India, will actually be shipped since the performing vessel is now fully open again in the U.S. Gulf. A couple of traders are studying 20,000-30,000-ton cargoes of ethanol to India, and some small lots of phenol have been mentioned too.

Europe

It has been a similar week to the last one along the route into the North Sea and Baltic, whereby owners are content with the employment levels on their ships, and with the majority of owners successfully avoiding having any really unworkable positions. There are, however, a couple of exceptions to this, and they really do stand out. Freight is altogether a different issue, with owners agreeing that levels are highly competitive throughout the region. Base oils have been rather slow out from the Baltic, but there have been a couple of bookings from Germany and France into Latvia instead.

The immediate pressure along the southbound route seems to be off for the moment since almost all scheduled and irregular ships have managed to fix back into the Mediterranean. There is, however, a sizeable fleet of ships making their way up to Continental Europe where they will be touting for cargoes back into the Mediterranean for the end of May through the first half of June, which could bring about a return of that pressure. The bulk of the enquiries are composed of chemicals, such as styrene, ethylene dichloride, acrylonitrile, paraxylene, orthoxylene, acetic acid, biodiesel, mixed xylenes, methyl tertiary butyl ether, urea ammonia nitrate and acetates. A smattering of base oil activity has been recorded, including cargoes to Cyprus and Oran, Algeria.

Trade remains patchy along the northbound route. Regular products, such as aromatics, have been pretty slow, and methanol seems to be staying within the Mediterranean, contrary to the enquiries seen last week. Base oil interest is still there, but chiefly for oil majors.

It has been one of those weeks when every owner has believed the market to be slow, yet when it comes to analysing prompt positions, few of them actually had prompt space in the inter-Mediterranean route. Those in the West Mediterranean were able to turn to biodiesel, which has been more active, while those in the East Mediterranean have been picking up parcels of methanol, caustic, acrylonitrile, clean petroleum, acetic acid, biodiesel, molasses and vegetable oil. Base oil movements have been steady.

Rates along the transatlantic route lost a little more ground this week because the number of fresh requirements has been limited, and owners had the urge to cover their prompt positions. Base oils in the amount of 6,000 tons from Rotterdam, Netherlands, to Houston were covered in the mid $30s/t, for example. A couple of pyrolysis gasoline movements went for similar figures. Some paraxylene was done, and some acetone was being worked.

Levels are essentially unchanged into Asia. They perhaps ought to be coming under greater pressure because there are a couple of ships that need to go out to Asia, but finding sufficient cargo is one of the main problems. One of the scheduled carriers has dropped into July, which has given a boost for the remaining June ships as that vessels cargoes are now looking for June candidates instead. Paraxylene continues to be fixed, as do base oils. Base oils in the amount of 8,000 tons were reportedly booked from Antwerp, Belgium to Singapore and Ulsan, with a further 6,000 tons from Augusta, Sicily, to Singapore.

Certainly a significant amount of activity is taking place to India and the Middle East Gulf. Some seven to eight ships alone have been booked for May loading, in addition to the regular, scheduled carriers. Base oils seem to be playing a major part in this, but some is believed to be material that should have gone on contractual tonnage, but ended up getting delayed. Ethylene dichloride and acids are another major component. Vegetable oil is also pretty busy, and that has swallowed a similar number of vessels this month.

Asia

Demand remains subdued throughout the domestic Asia route, according to most owners, with only a few seeing a slight upturn after the holiday period. It is difficult to see quite why there is a lack of cargo. Chinese inventories of key products have been declining along the eastern seaboard. Plant turnarounds are no more than normal. Commodity prices are volatile maybe, and perhaps some buyers are playing a waiting game, but crude and feedstocks have not collapsed and have even rebounded slightly. Whatever the cause, it makes for an unexciting shipping market, with lots of open ships still within May. Base oils are moving, but volumes still tend to be on the small side.

There is a little more zing for exports on the transpacific route at last. Space is already quite tight for the remainder of May, but becomes quite pronounced during the first half of June when none of the big ship owners show any space. The recent dive in the amount of benzene moving to the U.S. has been a big factor in owners pulling away from this route. It was estimated there was just over 20,000 tons shipped from Korea in April, for example, whereas in May it is estimated there will be 60,000 tons moved. The market to Europe is also pretty active. There are a lot of small parcels, but owners are filling out, and there is not a great deal of space left on the stainless ships. There is a bit more space on the coated palm oil ships from Southeast Asia, and some of that space can be extremely low. Orthoxylene in the amount of 6,000 tons from Singapore to Antwerp-Rotterdam-Amsterdam was attempted, for example, but the charterer could not find a ship able to take that volume and ended up booking 4,500 tons in the $70s/t. Interestingly, there is mention of base oils being discussed from Southeast Asia to Europe.

It really has been quiet along the route into India and the Middle East Gulf. The regional market sees reduced demand, with even the clean petroleum side slackening. Base oils appear to be calm. Eastbound is soft, though base oils are under discussion. Westbound space has been gradually tightening though, with almost all the smaller ships gone from the 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.