This leaves a void which is being filled with outsiders who are coming on berth against freight levels of $70s, $80s and $90s per ton, depending upon the size of parcel, its complexity and how many ports are required. It would be hard to find a ship willing to fix 5,000 tons of base oils from Houston to Ningbo, for example, at less that $80 to $85/t for the first half of December.

At this stage however, not all the contractual cargoes have been nominated, and it may be that some space does open up in December. Historically, December sees a lot of material move deep-sea to avoid year-end taxes, which might make it a little risky to hold off in the hope of latching onto space that is not used for contractual business.

At the moment, few of the other routes from the U.S. Gulf are showing much promise. It is conceivable however that should the U.S. Gulf-to-Asia market dry up completely in terms of vessel space, that shippers look to shift their inventories onto other markets instead. For the time being though, rates on these other routes are stationary.

Europe
Many more cargoes have been seen across the domestic European markets over the past week, and most ships have fixed through until the end of November or early December, with a fortunate few finding employment until mid December. Perhaps rather surprisingly, freight rates have remained motionless, almost as though the owners are just grateful for the cargo that they have not had the temerity to ask for higher freights. This may change should the situation last a little longer.

Nothing special has been seen on the transatlantic market from Europe to the U.S. Gulf. There had been some possible interest shown in shipping benzene across, but this opportunity looks to be disappearing as prices firm in Europe. We would say that 5,000 tons of base oils from Rotterdam to Houston could fetch the high $20s/t or low $30s/t today.

Europe-to-Asia is where most of the European deep-sea action is taking place. November space quickly filled, and the focus is on the first half of December at the moment. Scheduled space is tight until later in December, which means that a flotilla of smaller ships is being fixed. It is fairly easy to recruit outsiders on berth from Europe or the Mediterranean, and consequently freights have not surged by the same amount as have those from the U.S. Gulf. Rates have jumped by about $5/t to the high $70s/t for a 5,000 ton cargo from Rotterdam to China. Numbers remain unchanged into India, typically in the low-to-mid $60s/t for 5,000 tons from Rotterdam to Mumbai.

Asia
Primarily driven by China, coastal markets in and around northeast Asia are busy with mostly aromatics being shipped into China. There is some trade in aromatics both north and southbound too, but less so inter-southeast Asia.

Exports from Asia to Europe and the United States are steady, with no major changes seen on freight rates.

So far, palm oil traffic is active into China and India, and there have been more cargoes into the Mediterranean, Africa and Red Sea. India and the Middle East Gulf regions have been fairly busy, with a few more cargoes detected westbound to the Mediterranean and Europe. Freights here have lifted by several dollars, but are essentially between $50 to $55/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.