It has been another week of feeble activity in all areas. Europe and the United States have lots of empty ships available for prompt loading, and Asia too has been more subdued than in previous weeks.
U.S. Gulf of Mexico
A growing number of vessels are showing open in the U.S. Gulf prior the end of the month, most of which are larger units of 12,000 dwt or more. Demand for space is sporadic, and many of the potential cargoes that are quoted do not mature into firm business. Consequently, freights on most of the U.S. Gulf routes are weak.
Especially quiet is the transatlantic eastbound route where 3,000 ton cargoes from Houston to Antwerp-Rotterdam-Amsterdam have dropped to levels of around $60 per ton. Competitive offers can be found into the Mediterranean too. Several ships need to take completion cargoes in order to have full ships, and there is not much out there to take aside from vegetable oil.
A few more cargoes popped up from the U.S. Gulf to the Caribbean and to the east coast of South America, but not in sufficient quantities to disturb the status quo.
Views are divided on routes going to the Far East. Levels seem to be down into India, and 5,000 ton cargoes from Houston to Mumbai have slipped by $2 to $3/t. However, owners seem to hold firm ideas for small lots from the U.S. Gulf to the Far East, and the rates for 3,000 tons from Houston to China are hovering around $100/t. However, looking ahead there does seem to be plenty of scheduled tonnage on berth into Asia in October.
Europe
Every ship owner has a story to tell of cargoes missed to competitors at what they believe to be outrageously low rates. The truth is that with so many ships scouting for cargoes within Europe, it is only a matter of time until an owner capitulates and accepts the freight levels offered by the charterers. The key to low freights is the ability to be flexible on the loading dates and having a cargo that does not require many, if any major approvals. With no obvious improvement in cargo volumes in the Mediterranean and North Sea, it is not difficult to secure tonnage for most shipments.
Rates on the long-haul routes out of Europe remain weak too. Transatlantic westbound is slipping, in spite of a peppering of benzene/toluene/xylene cargoes from Antwerp-Rotterdam-Amsterdam to the U.S. Gulf. Several ships can offer space into South America too. Trade is rapidly drying up from Europe to Asia, and ships on berth cannot fill out. Rates into India seem to be holding however. Demand here is still steady, with rates reported on some 5,000 ton cargoes from the Mediterranean to the west coast of India as being in the $80s and $90s/t.
Asia
Inter-Asian regional markets saw freights tail off this week on the back of shrinking demand. This has mostly affected the smaller tankers of 6,000 dwt or less. Larger vessels are still finding sufficient employment in the palm oil markets to India and Pakistan. Rates for palm oils to Europe continue to inch their way upwards too, but chemical activity in this direction is mostly among the smaller more specialised grades where rates are commonly over $100/t.
A larger parcel of base oils from Korea to Antwerp-Rotterdam-Amsterdam would go for something around $60/t these days, and nearly $10/t less to Houston. Rates are weak out of the Middle East Gulf-to-India region too, with levels in the $40s/t for 5,000 tons of base oils from Iran to the Eastern Mediterranean.
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.