An assortment of international holidays put paid to most activity this week, with just the routes into Asia from the U.S. Gulf and Northwest Europe showing any strength. Most other trade lanes were steady but uninspiring.
U.S. Gulf of Mexico
In spite of it being only half a working week, the U.S. Gulf-to-Far East route managed to fill out an impressive number of additional ships that were introduced onto the route to help cope with demand. As expected, rates soared, with levels seen in the $70s and $80s per ton for 5,000 to 10,000 ton cargoes. There are several ships that can cater for end-December cargoes, and we would expect to see 3,000 tons of base oils from Houston to main ports in China command around $105 to $110/t.
There is a small amount of space from the U.S. Gulf to the Middle East Gulf and India, but with levels for 5,000 tons of vegetable oils from the U.S. to the Middle East Gulf paying over $100/t, the expectation would be that base oils should pay the same.
U.S. Gulf-to-Mexico and the Caribbean is a flat market. Spot requirements are not common, but scheduled tonnage is filling up on contractual nominations. It is virtually the same scenario from the U.S. Gulf to the east coast of South America.
Transatlantic eastbound is quiet, with little interest in moving material to Europe. Rates for 4,000 to 5,000 ton cargoes from Houston to Rotterdam would be around $40 to $41/t.
Europe
The market fell victim to the combined holidays worldwide, and by the end of the week all activity had virtually ceased. The market into Asia was about the only route that created many opportunities. Unlike the U.S. Gulf-to-Asia route, there is a large pool of reserve tonnage to call upon once the scheduled carriers filled out, and there have been at least six additional ships brought into service. Rates stiffened, but not to the same degree as U.S.-to-Asia rates.
From Antwerp-Rotterdam-Amsterdam to main ports in China, 5,000 ton parcels registered an increase of around $3 to $4/t, but this equates to a level still below $80/t.
Freights into India have actually dropped, and we see owners willing to fix 5,000 ton cargoes from Rotterdam to Mumbai in the low $60s/t.
Transatlantic routes are very slow. Only a few types of chemicals are making their way across, and we see numbers in the mid-to-high $20s/t for 5,000 tons from Rotterdam to Houston for instance. Mediterranean-to-U.S. is also overtonnaged, and there is ample space for most requirements.
Domestic traffic flattened through the week, allowing a build up of tonnage in the North Sea and Mediterranean, for example, which is more than adequate for the markets needs.
Asia
There has not been much change to report in the Asian situation. Coastal routes in and around Asia are steady enough, but there is no great push for year-end as there is in some other markets. Space into India and the Middle East Gulf has to compete with palm oil cargoes, the rates for which are a little firmer. Rates into Rotterdam for 5,000 ton cargoes from Korea are in the low-to-mid $60s/t. It may be possible to achieve a rate some $10/t lower than this for a similar cargo into Houston on the back of a scheduled lifting. Business in and around India and the Middle East Gulf is still firm with plenty of ships but plenty of cargoes too. 5,000 tons of base oils from Iran to Turkey may end up costing a few dollars more, and a level over $55/t may have to be considered.
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.