U.S. Gulf of Mexico
Freights have nudged downwards on the U.S. Gulf to Brazil and Argentina run and also on the U.S. Gulf to the Caribbean trades. Shipping 3,000 tons of base oil from Houston to northern Brazil would probably cost around $55/t currently and upper $20s/t into east coast Mexico for example.

Finding space for a larger lot on a scheduled carrier to Brazil might be tricky for prompt loading, but the reason why freights are drifting is that there is a greater number of ships open in the U.S. Gulf and Caribbean, and a larger cargo would be sufficient incentive to draw one of these vessels onto the service.

Transatlantic eastbound is deemed stable, although there are a couple of ships looking to complete into both the Mediterranean and Northwest Europe off prompt dates. U.S. Gulf to Asia sees a steady run of contractual business allied with a bunch of aromatics and styrene spot quotations. Rates are fairly steady on this route too. U.S. base oil exports seem to be going through a quiet phase at the moment with fewer cargoes seen.

Europe
Most coastal services have been languishing in the doldrums for the past couple of weeks. The Mediterranean especially has been quiet with plenty of open tonnage and few opportunities to fix. Rates are quite keen as a consequence.

A few base oil requirements have started to trickle in for destinations in the eastern Mediterranean, and most are fixed fairly quickly with little effort. Several base oil shipments have occurred from the Baltic to the United Kingdom and Northwest Europe, again with relative ease. Freights in the Baltic and North Sea remain competitive with so many ships from which to choose.

Nothing much is happening westbound transatlantic, and a small cargo from Antwerp-Rotterdam-Amsterdam to the U.S. Gulf would cost less than $40/t. September space remains uncovered to Asia too. Traders have been looking at smaller cargoes of base oils into southeast Asia, but it is only when cargoes of 5,000 tons or more are tabled that the rates start to look more appealing.

The trade into India is running fairly well on the back of phosphoric acid, chemicals and the occasional parcel of base oil. Base oils have been fairly quiet into the Middle East Gulf too, but a couple of new requirements have just surfaced. Several ships have space in this direction and a 5,000-ton enquiry would probably end up in the mid-high $70s/t, depending upon the actual ports.

Asia
The window to ship aromatics from Asia to Europe and the U.S. Gulf has closed for the moment. This leaves several ships trying to find ways to re-position back into the U.S. Gulf.

Some have been fortunate to land sulphuric acid cargoes, but otherwise there is little else of sizeable volume. We therefore see rates declining from Asia into the U.S. and we believe that it is possible to fix 5,000 tons of cargo from Korea to the U.S. Gulf at around $50/t to $52/t.

The amount of palm oil business to Europe is sufficient to fill the bigger ships, and there are some small parcels of chemicals available. There are quite a lot of cargoes into India, the Middle East Gulf and Red Sea too, but the problem seems to be more in the Middle East Gulf and India.

There are some export cargoes, but they are insufficient for the amount of tonnage available, and rates look to be dropping. Shipping 5,000 tons of cargo from Middle East Gulf to Singapore is down into the low to mid $40s/t, and 3,000 tons to India is about $35/t. Rates back to Europe and the Mediterranean are declining, and a large cargo would generate a lot of interest from ship owners.

Adrian Brown is senior market analyst for chemicals and base oils with SSY Shipbrokers, London. Information about SSY can be found at www.ssyonline.com. Adrian Brown, in the U.K., can be reached directly at research@ssy.co.uk or by phone at +44 1207-507507. In the U.S., SSYs Steve Rosenthal can be reached at fix@ssychems.com or +1 203-961-1566.