Demand is still painfully slow into Asia. The next requirement of 10,000 to 20,000 cubic meters of ethanol has been quoted from the U.S. Gulf to Subic Bay, Philippines, for the first half of September. Twenty thousand tons of methanol was being investigated from Beaumont, Texas, to the Far East for the end of July. Styrene remains a possibility. Rates are all over the place, and depend on timing, with 5,000 tons of easy chemicals from Houston to main Far East ports attracting offers in the mid-$50s per metric ton, for example, but a prompt lifting of 13,000 tons of chemicals was booked U.S. Gulf to Far East for a reported high $40/t.

The eastbound transatlantic route is about the only one where there is a constant flow of material. It has also helped that a few stragglers in the Great Lakes and Caribbean decided to ballast back to Europe. Rates are stable – 4,000 tons of vinyl acetate monomer from Houston to Antwerp is claimed to have gone in the mid $40s/t, with the same figure cited for a fixture of 7,000 tons of styrene from the Mississippi. Three thousand tons of base oils shipped from Houston to Le Havre, France, and there is a pending requirement to ship 1,500 to 2,000 tons of base oils from Houston to Antwerp. The base oil cargo to Naples from last week was also booked.

There does not seem to be much evidence of base oils getting fixed in the Caribbean area. Instead, it is a mixture of grades, such as ethanol, orthoxylene, caustic, molasses and urea ammonia nitrate that are receiving attention from traders.

The route into the east coast of SouthAmerica has been quite busy in terms of base oils this week. Five thousand tons were quoted from Houston to Rio de Janeiro for August. Others are looking at 7,000 tons of base oils from Houston to Rio de Janeiro and Santos, Brazil, also for August, while another account has quoted 2,500 tons of base oils from Houston to Buenos Aires for shipment next month. Apart from the occasional ethanol shipment, and an inquiry to send 13,000 tons of ethylene dichloride to Maceio, Brazil, there is not a great deal else around.

Base oils are still a major constituent of the India and Middle East Gulf route. Traders are out with 12,000 tons of base oils from Port Arthur to Mumbai for prompt loading, while an inquiry to ship 4,000 to 10,000 tons of base oils has been seen from Houston to Mumbai for August 1-10. Ethanol has also been significant on this route, with a huge cargo fixed to India, and a smaller one of 20,000 cbm being fixed on subjects.

Europe

The week produced little in the way of new business into the North Sea and Baltic, at least certainly not sufficient to halt a build-up of vessel space within the last week of July. Too few August quotations have been received as well, which is ominous. A sprinkling of base oil inquiries have been detected from the Baltic, but there are two vessels fixed with large quantities to West Africa for loading now, which has left scant volumes for European destinations.

It has been another sluggish week along the southbound route. Most of the prompt ships have managed to fix away, but there is a long list of August ships. Base oils are still under consideration to Turkey, and other grades being shipped are methyl tertiarybutyl ether, methanol, acrylonitrile, styrene, paraffins and pyrolysis gasoline.

A couple of routine northbound base oil shipments were noted from Augusta, Sicily, and Cartagena, Spain. Otherwise, it is pretty much business as usual, with 11,500 tons of toluene and pyrolysis gasoline fixed from two ports in Italy to Antwerp-Rotterdam-Amsterdam at 450,000, for example.

There has been a pronounced reduction in the amount of new business going forward throughout the inter-Mediterranean route, which leaves a growing number of vessels open this side of August. A slowdown in biodiesel is felt acutely by owners with ships in the West Mediterranean. To make things worse, the clean petroleum products market has collapsed too, so that medium-range oil tankers are taking cargoes that would be shipped by Handysizes, and Handies are stealing cargoes from intermediate tankers, which in turn are picking off cargoes from the small tanker fleet. Base oils, however, have seen quite a bit of action, with more than the usual number of cargoes fixed into Haifa, Israel. Egypt has received a couple of shipments, and there have been base oils looking to go to Beirut, Greece, Oran, Algeria, Turkey and Varna, Bulgaria.

It has been a slower week along the transatlantic route, and the large number of outsiders on berth is causing freight rates to come under pressure. Five thousand tons of paraxylene from Rotterdam to the U.S. Atlantic Coast, for example, was heard to be fixed in the mid $30s/t, a couple of dollars down from the previous shipment, probably because this latest ship has been fixed on time-charter in the Caribbean and needs to re-position across.

The Far East route is reasonably stable. Styrene continues to be talked for prompt loading, as does acrylonitrile from Aliaga, Turkey. Some of the butanediol, propylene oxide and diisodecyl phthalate cargoes have been booked, with the other grades from last week being worked.

A veritable procession of ships are coming on berth through August into India and the Middle East Gulf, because owners see better opportunities in the Middle East Gulf than in Europe. Vegetable oil rates have plummeted from the Black Sea, with traders eyeing $34/t for 20,000-ton cargoes. The same rate is also said done on a cargo of phosphoric acid from Tunisia. Traders are looking at a couple of small base oil cargoes, including one from Aliaga, Turkey, to Hamriyah, U.A.E., the rates for which should have fallen too.

Asia

Of some consolation to owners is that there is not a great deal of July space left on the domestic Asia route. However, there is no great surge in demand and owners will have to be content to trade with a forwards window of around 10 to 14 days. Base oils seem to be fairly robust, with enquiries down from Korea to Singapore, Merak, Indonesia, and Tanjung Priok, Indonesia, as well as into China. A number of base oil movements have been detected within Southeast Asia too. For example 2,000 tons were said to have been worked from Port Klang, Malaysia, to Ho Chi Minh, Vietnam, at $90,000.

There has been a flurry of benzene activity for the second half of August on the transpacific export route. Five thousand tons of base oils were quoted from Ulsan, Korea to Brownsville, Texas, and 16,000 tons of base oils are said to have fixed from Singapore to Houston, in combination with 10,000 tons to Rotterdam. Apart from a couple of new-buildings, prompt space to Europe is limited. Multiple parcels of chemicals have been fixing to Turkey, along with cargoes of biodiesel to northwestern Europe. A shortage of glycol in Europe has seen traders look to supply Asian material, and some caustic was reputedly booked from China to Durban.

There is still a substantial amount of cargo being quoted in the regional markets along the India and Middle East Gulf route, although perhaps not to the same extent as in the previous week. Rates are firm though, with 5,000 tons of ethylene dichloride from Al Jubail, Saudi Arabia, to Hazira, India, being booked at $44/t, an increase of around $10/t over usual levels. Base oils have been seen from Yanbu, Saudi Arabia, Karachi, Pakistan, and Sitra, Bahrain, this week. On the Eastbound route, a couple of ships can still accommodate the first half of August parcels, but there is nevertheless an impressive amount of cargo quoted from the Red Sea, Middle East Gulf and India. Westbound too sees a lot of business quoted and space is fairly tight, keeping freight rates firm. Fifteen thousand tons of paraxylene was seemingly booked from Al Jubail to Algeciras, Spain, and Sines, Portugal, in the mid $50s/t. Traders continue to look for space for base oils from Al Ruwais to the Mediterranean, and 2,000 tons of base oils were quoted Yanbu to Alexandria.

This report was originally featured in the July 25 edition of Lube Report Americas.

Adrian Brown is a senior market analyst for chemicals and base oils with SSY Shipbrokers, London, can be reached atfix@ssychems.comor +44 12 0750 7507. Information about SSY can be found atwww.ssyonline.com. In the Houston office,Steve Rosenthalof SSY’s Chemical Tanker Department can be reached directly at +1 (713) 652-2700 and Jordi Maymi in Singapore can be reached at +65 6854-7127.