There has not been any great change to the markets in the U.S. and Asia this week, but Europe is considered to be a little slower.
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The route into the Far East remains one of the busiest lanes out of the U.S. Gulf. Styrene has induced much of the demand, with traders quoting quantities of between 5,000 tons and 15,000 tons to Korea and China. Ethylene dichloride has also generated a lot of interest, and more recently methanol has been seen. With space becoming tighter, owners are beginning to ask for slightly higher numbers, but so far, levels of $50 to $53 per metric ton can still be achieved for 5,000-ton parcels from Houston to Mainport Far East.
Business was more sporadic this week on the transatlantic eastbound run, with styrene taking a back seat. Traders have been checking the possibility of moving glycols and cyclohexane to Antwerp-Rotterdam-Amsterdam, and there has been some acrylonitrile from the Mississippi too. There is still no sign of any base oil activity, though.
In a rather lax week, rates softened a little on trade from the U.S. Gulf to Mexico, thanks in part to an ample tonnage situation. Levels are just over $20/t for 5,000-ton parcels out of Houston to the east coast of Mexico. Bits and pieces of acetone, methanol, ethanol, mixed xylenes and caustic were noted from the U.S. Gulf to Caribbean this week.
Ethanol has been driving rates on the southbound service to the east coast of South America, with the last couple of shipments done at quite strong levels. A large lot of paraxylene and acetic has been attempted to Brazil, while 9,000 tons to 10,000 tons of styrene were fixed from the U.S. Gulf to Munguba, Brazil.
Contractual volumes must have fallen substantially for a couple of major players in the North Sea and Baltic region, as they seem to have far more space than usual to play with on the spot market. Most other owners have managed to fix their ships ahead by five to 10 days. Base oils have been slow this week, with ethanol and biodiesel being the main products in demand. Rates are pretty competitive, with 3,000 tons of biodiesel from Antwerp-Rotterdam-Amsterdam to Thames, United Kingdom, going for a lump sum rate of around 63,000.
Cargo volumes have remained thin, and with plenty of ships having completion space, rates have come off in some cases. 3,000 tons of easy chemicals from Antwerp-Rotterdam-Amsterdam to Huelva, Spain, secured low 30s per ton. Interestingly, it would seem that 4,000 tons of base oils were booked from Liepaja, Latvia, to Marmara, Turkey.
Base oils are a little more active on the northbound route. Aside from the regular in-house movements by the major producers, 5,000 tons of base oils were booked from Greece to Le Havre, France, following another recent lifting of base oils from Greece to Ghent, Belgium. Furthermore, over 7,000 tons of base oils are enquiring about shipment to Rotterdam from Kavkaz, Russia.
Demand remains pretty flat in the West Mediterranean, and were it not for the myriad of biodiesel shipments within the area, many more ships would be idle. The lack of base oils out of Livorno, Italy, due to the recent force majeure there has created quite a few more possibilities for base oils to be shipped from other suppliers. It would appear that Greek producers have capitalized on the situation with several more cargoes heading to Turkey.
There has been very little new business on the westbound transatlantic run. A load of 5,000 tons of paraxylene from Rotterdam to the east coast of Mexico was fixed for around $33/t-$34/t. Several cargoes of benzene and pyrolysis gasoline have been waiting to prey on any part-cargo space left, with talk of levels in the mid $20s/t for 5,000- to 6,000-ton cargoes from Rotterdam to Houston. Base oils have not been active this week.
Most of the business that is getting fixed into the Far East is routine, but cargo sizes are small and are well-suited to the scheduled ships already on berth. As such, the rates on these 1,000-ton to 2,000-ton parcels secure high levels, with products such as butanediol, acetic anhydride, glycol ethers, octene, oxo-alcohols, lubricant additives, and so on.
Traders were checking freights on 2,000-ton to 5,000-ton parcels of base oils to China from the Mediterranean, but it is hard to envisage such business getting done. Ethylene dichloride has been about the only large cargo quoted, and even that has options to go to India instead.
Base oils have become more common on the India and the Middle East Gulf route, with spot requirements noted from the Baltic, northwestern Europe and Mediterranean. There has also been a small cargo of base oils quoted to Aqaba, Jordan. Ethylene dichloride in the amount of 10,000 tons was booked from Stade, Germany, to the west coast of India in the low $60s/t – which is very much unchanged from previous shipments.
Business is slowly resuming after the long holidays in China, with many of the regular enquiries appearing. Two or three shipments of base oil have now been concluded from Cilacap, Indonesia, to China in October, with rates $20/t-$30/t higher than 3 months ago. Apart from regular Korean volumes, base oils have also been noted looking to ship from Japan to Singapore. In general, space is pretty tight through to November in many parts of Asia.
Freights have stayed pretty much unchanged, however, with 3,000-ton parcels from Korea to mid China going for mid $20s/t. Northbound numbers are showing a firming trend, and there is a feeling that southbound is a touch stronger too, seeing that some easy cargoes, such as caustic, are not finding offers at the desired levels from owners.
Space is rather scarce on the transpacific route through October and November, with the exception of a couple of vessels that lack approvals. Part of the problem lies in that owners are able to trade the ships more profitably in the palm oil market to India and bring back chemicals, and even some regular players to the States have adopted this approach. It is therefore of no great significance that there is no benzene currently to the U.S., and, with a couple of sulphuric acid cargoes around to Chile and Venezuela, there is a chance those non-approved vessels will get sucked into the acid business instead.
Base oils totalling 12,500 tons were quoted from Singapore to Houston.
October space is mostly tight to Europe, though a bidding war between two owners saw rates for 8,500 tons of used cooking oil from South China to Antwerp-Rotterdam-Amsterdam tumble to the low $60s/t. Other cargoes of used cooking oil were booked from Pasir Gudang, Malaysia, to the U.K., with a 4,000-ton cargo securing rates in thehigh $90s/t and a second lot going for $94/t.
The India and Middle East Gulf region has been fairly active in advance of the Diwali celebrations in India that commence October 18. Space has become quite tight in the region, and, therefore, the holiday itself may have little impact on rates.
Base oils are as busy as normal from all the main production sites. Eastbound space is tight, whether for loading now or later in November. All the same, rates do not seem to have risen, with 15,000 tons of paraxylene being worked from Al Jubail, Saudi Arabia, to Yangpu, China, for $36/t-$37/t. There is a considerable amount of demand westbound, and prompt space is scarce. Large lots of cyclohexane, paraxylene, vinyl acetate monomer, glycols and caustic have been noted, as well as several large relet cargoes of mixed grades that have recently been paying in the $70s/t to Europe.
Chemicals amounting to 7,000 tons from the Middle East Gulf to the U.S. Gulf were fixed in the mid $80s/t, while 37,000 -38,000 tons of methyl tertiarybutyl ether from the Middle East Gulf to the Caribbean paid $1.5 million.
Adrian Brown is a senior market analyst for chemicals and base oils with SSY Shipbrokers, London, can be reached email@example.com or +44 12 0750 7507. Information about SSY can be found at www.ssyonline.com. In the Houston office,Steve Rosenthalof SSY’s Chemical Tanker Department can be reached directly at +1 (713) 652-270 and Jordi Maymi in Singapore can be reached at +65 6854-7127.