The trick is all about timing. For the majority of routes, it is all about having a December loading and thus avoiding year-end inventory duties. However, in the case of the U.S. Gulf-to-Asia service, demand from China is so strong that we are already beginning to see requirements for January.

Rates on this service are somewhat notional. Scheduled space is more or less full for the month, which means that outsiders could be slotted on berth. Rate ideas on these (mostly) smaller ships are higher, with levels talked in the $80s and $90s per ton. So far, the chemical industry is unable to pass these numbers on to the final customer, and it depends how the rest of the month pans out to determine how successful these outsiders will be.

Other trades out of the U.S. Gulf have been steady, but always with vessel space around to hold back spot levels. Perhaps a slightly firmer approach has been felt from owners with ships trading U.S. Gulf-to-Northwest Europe, and indeed U.S. Gulf-to-Mediterranean is particularly tight on December space. U.S. Gulf-to-Brazil and U.S. Gulf-to-Caribbean however have no shortage of space and rates remain flat.

Europe
Again, there has been a spell of reasonable activity that has seen the European coastal fleet move on by another week or so. All the same, not that many ships are in sufficiently comfortable positions for the owners to be able to relax. Consequently, we are finding ship owners generally accommodating on charterers rate ideas as there is a great deal of uncertainty how long the market will continue to churn out cargoes before shutting down for Christmas and New Year.

The deep-sea market from Europe is a little more encouraging for ship owners. Transatlantic business has seen a resurgence in benzene and paraxylene, as well as more cargoes of caustic and gasoline components. Rates are beginning to firm as scheduled carriers fill up. However, there is still an armada of smaller units that might snap up a cargo to the U.S. at the last minute rather than sit idle for a week or so off Rotterdam as the market there closes for the festivities. This should probably hold rate levels in check.

Europe-to-Far East is seeing especially strong demand. Rates have inched upwards again, but as with the transatlantic trade there are always outsiders willing to commit against a decent base cargo. So far, 5,000 tons of chemicals from Antwerp-Rotterdam-Amsterdam to China are paying in the low $80s/t, and this level looks set to last. Routes from Antwerp-Rotterdam-Amsterdam to India and the Middle East Gulf have seen more enquiries, including some larger lots of base oils, pyrolysis gasoline, benzene and acid. Freights are not particularly strong, just because owners fancy escaping the confines of Europe and the potential lack of business. Numbers in the low $50s/t are possible for 5,000 ton lots from the eastern Mediterranean to the west coast of India, with a few dollars more for Black Sea loading.

Asia
Coastal trades in Asia are all pretty busy, and freight levels have seen increases of one or two dollars. As usual, China is the focus of much of the material from Korea and Southeast Asia. There are also reasonable trades both north and southbound, which keeps the coastal tanker folks happy.

On the long-haul export markets out of Asia, there is nothing sensational, just more a steady stream of contractual work. However, palm oil volumes are very strong, and freights have firmed, both into India and also on the routes into Europe. Cargo enquiries from India and the Middle East Gulf are plentiful both west and eastbound, thus keeping freights steady.

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.