It has been a very quiet week across all areas, partly due to the exodus of market participants to the American Fuel and Petrochemical Manufacturers conference in San Antonio, and partly because of the approaching Easter holidays.
U.S. Gulf of Mexico
Trading has been suspended for a week or two across much of the Americas because of the AFPM conference. Typically affected have been the U.S. Gulf-to-Caribbean routes where the volumes of vegetable oil, tallow and yellow grease have been steady, but the amount of new chemicals and base oil business seen has been minimal. Even small cargoes of clean petroleum have been hit, probably because traders have been shipping cargoes in larger sizes, and of course the strike at Trinidad will have had some impact on the regional trade.
The route from the U.S. Gulf to the east coast of South America is tight on prompt space and remains unaffected by the slowdown. Some part-cargo space becomes available toward the middle of April, but since there are still plenty of small parcels of chemicals and clean petroleum, this space is not expected to remain open for long. Rates have perhaps inched up by about a dollar or so compared to last week, but broadly speaking are still in the mid $60s/t for 5,000 ton cargoes from Houston to Santos.
Transatlantic eastbound has been quiet, although contractual nominations are strong and some owners already report hardly any spare capacity until late April. Cargoes include styrene, biodiesel and caustic.
U.S. Gulf-to-Far East is performing well on contractual liftings, so prompt space is thin. That said, traders report seeing little in the way of arbitrage opportunities, apart from the occasional cargo of paraxylene, ethylene dichloride, or ethanol.
Talk of base oils being shipped from the U.S. Gulf to Singapore has yet to be verified. As with the other main routes out of the U.S. Gulf, freight numbers are unchanged to Asia.
Europe
Trade has dropped away completely across the North Sea and Baltic this week. Clean petroleum continues to see some demand, but space in general is readily available and this has caused freights to weaken. Cold weather has returned to the Baltic, but it is really too late to affect base oil freights from the region.
Southbound into the Mediterranean has been disappointing and the cargo lists are thin. Northbound is also slow and rates remain competitive.
Inter-Mediterranean trades found clean petroleum to be a bit busier, but the chemicals and speciality products have been dull. Rates on the benchmark cargoes in the region have either remained the same or decreased. Base oil has bucked the trend however, and there have been a few more requirements for shipping into Turkey.
Transatlantic westbound has produced a small number of fresh cargoes such as caustic, paraxylene, and urea ammonia nitrate, but overall demand is lower than that of the previous week. Nonetheless, owners are still bullish, and a 7,000 ton cargo of paraxylene from Rotterdam to Wilmington was fixed in the low $50s, compared to the previous booking in the high $40s/t.
Europe-to-the-Far East has entered a quiet phase and a couple of vessels have space to fill in April. 2,000 ton parcels from Rotterdam to Ningbo have been taken at around $120/t. One cargo of base oils was fixed from the Black Sea to Singapore and another was covered into Fujairah, while other traders have been checking rates on base oils to Indonesia.
Asia
Domestic Asia trade routes have calmed down compared to the frantic pace we have been seeing over the past two or three months. All the same, space remains very tight well into April, and when ships are quoted with space they do not remain that way for long. Base oil demand is fairly significant at the moment with cargoes moving along all the main trade lanes within Asia. Base oils have also been quoted on the Asia export routes, with cargoes looking to ship to Europe, the Americas, and the Middle East Gulf. Rates remain firm on the long-haul routes out of Asia.
Westbound space from the Middle East Gulf–to-India region is scarce during the first half of April. 3,000 tons of easy chemicals from Mumbai to the west coast of Italy were booked at $102/t, which is a bit less than the previous booking, but in this case the vessel was already scheduled to both ports. Indications were being asked on 3,000 tons of base oils from Sitra to Houston, but there are only a couple of carriers with sailing schedules in this direction, which makes it tricky to line up tonnage.
Eastbound is stable and rates are working out at unchanged levels. 6,000 tons of easy chemicals from the west coast of India to Singapore fetched low $30s/t, for example.
Adrian Brown is senior market analyst for chemicals and base oils with SSY Shipbrokers, London. Information about SSY can be found atwww.ssyonline.com. Adrian Brown, in the U.K., can be reached atfix@ssychems.comor by phone at +44 1207-507507. In the London office SSYs Jordi Maymi can be reached atfix@ssychems.comor +44 20 7977 7560.