U.S. Gulf
Very slowly, the number of ships fully open in the U.S. Gulf has been reduced, mostly because of possible changes in biodiesel regulations in Europe that may be introduced in April, which sent traders scurrying to cover prompt requirements. Rates have consequently firmed slightly with high $30s/t being done for 5,000 t lots for U.S. Gulf to Antwerp-Rotterdam-Amsterdam. However, the next batch of aromatic imports from Europe are either loading or on the way, which should provide a number of first half February positions in the U.S. Gulf.
No great changes to report on the inter-Caribbean rates, nor levels for U.S. Gulf to Brazil. U.S. Gulf to Asia remains pretty weak too. Traders had been hoping to send benzene/toluene/xylene shipments to Asia, but product availability is the main issue, and without many other large cargoes, owners are still happy to fix 5,000 t lots U.S. Gulf to the principal ports of the Far East at $40/t.
Europe
Rather more spot market business was seen on chemicals, biofuels and clean petroleum within Northwest Europe. However, regular, or contractual business has lagged behind, meaning that there is still a good crop of prompt vessels able to load most cargoes, and rates remain competitive. We are starting to hear of owners unwilling to risk going into the Baltic in February. Water temperatures around ports such as Tallinn are almost at freezing point, and ice is slowly forming around Kotka for example. At the moment it is thin, but owners are inclined not to take risks, or breach insurance restrictions. It is not a serious issue yet, and there are plenty of ships with Ice class still willing to go in and load.
The Mediterranean is relatively quiet, and freight levels remain depressed. There is a possibility to fill up some ships from the Black Sea to Antwerp-Rotterdam-Amsterdam – suggest trying $75/t for a 1,000 t cargo. $75/t applies too for 6,000 t cargoes of base oil from the Mediterranean to Nigeria, maybe slightly more for the trickier loading ports. Transatlantic rates from Rotterdam have been bumped up for January loading due to a sudden rush of aromatics parcels. Numbers have risen to around $43-44/t for 5,000 t lots for Antwerp-Rotterdam-Amsterdam to the U.S. Atlantic Coast. Arbs are fickle things though, and already, some chemical traders have lost interest. A few owners are growing nervous, and it may be that rates come down again shortly.
Europe/India and Asia has seen a boost in demand for space, although sufficient owners are chasing these cargoes that rates remain in the high $40s-low $50s/t for 10,000t from the Mediterranean to the Middle East Gulf*-India. Watch out for phosphoric acid shipments restarting to India however. We understand that the Tunisians have just sold 80,000 t for the end of January through the end of March, and the Moroccans are expected to resume production soon, with shipments starting later in Feb. Acid prices are sensibly down from 2008s fourth quarter, and could account for a lot of space quite quickly. Chemicals are active into Asia too, but rates are so far unchanged from previous weeks.
Asia
The Lunar Holidays in Asia have effectively called a halt to inter-Asian shipping movements this week. The run-up period was pretty slow, but the post-holiday period may generate some business as buyers re-stock. Certainly at this moment there is plenty of prompt open tonnage, but it may be a tighter picture in a week or two. Whilst exports from Asia to Europe and the United States have not been strong, the overhang of prompt vessels, comprised mostly of new ships, has gradually diminished.
We have seen small cargoes of 5,000-8,000 t chemicals fixed from Korea-Taiwan to the Mediterranean in the region of $85-90/t, and for similar business to the U.S. we have seen numbers down into the $75-80/t region, which is roughly a $5/t decrease since last week. Typical freights for palm oils from Malacca Straits to west coast India are around $31-33/t for 8,000-12,000 t cargoes. For a few dollars more, some owners would consider taking base oils from Korea to west coast India to save the ballast and deviation of having to go down to the Straits.
There is more action from India and the Middle East Gulf*, and levels have just edged upwards by a couple of dollars on most shipments. Large volumes of chemical cargoes have been quoted both to Europe and to Asia. One side-effect has been that there are now a number of ships which can offer interesting rates on part-cargo space both to Europe and Asia. If these ships are for some reason not workable, then levels of $29-30/t may have to be considered on 5,000 t lots from Iran to west coast India and $77-80/t for Mediterranean or Northwest Europe.
*Middle East Gulf is the international shipping industrys preferred name for the body of water known both as the Persian Gulf and the Arab Gulf.
Adrian Brown is senior market analyst for chemicals and base oils with SSY Shipbrokers, London. Information about SSY can be found at http://www.ssyonline.com. Adrian Brown, in the U.K., can be reached directly at research@ssy.co.ukor 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.