Many owners shipping to the Caribbean are still reporting significant problems with their scheduled loading programs, due to a large extent to the aftermath of the fire at the ITC terminal and the ongoing clean-up campaign, as well as occasional bouts of fog in the Houston area.

Ethanol continues to provide a healthy basis for ships to go on berth into South America, but there has also been interest in caustic and ethylene dichloride. A further 3,000 tons of base oils cargo was noted from Pascagoula, Mississippi, to Rio de Janeiro for May 15 through May 25, and 10,000 tons of paraxylene was seen from Corpus Christi, Texas, to Suape, Brazil, for the first half of May. A tender for sulphuric acid into Argentina is believed to have been won by European suppliers this time around. Six hundred and twenty-five tons of drilling fluid was circulated from Houston to Peru for prompt.

On the Northbound route, biodiesel to Europe is one way to reposition ships out of the area, but vegetable oil is the primary method, and rates have been holding well, and in some cases creeping up a little. Ethanol is considered by some to hold potential, but so far most shipments have been out to Asia or have been internal shipments. Bright stock is still under discussion from Brazil, while a shipment of 4,300 tons of light neutral is believed to have been fixed into the U.S. Gulf from Argentina.

Space remains tight on a prompt basis from the U.S. Gulf to Antwerp-Rotterdam-Amsterdam, with a bit of space still available off the U.S. Atlantic Coast. Some owners feel that rates are firming, and for certain items this looks to have been the case, but in other examples there have been some very competitive numbers confirmed. Five thousand tons of styrene from Houston to Rotterdam reportedly achieved mid $50s per metric ton for the end of April, while 2,000 tons to 3,000 tons of what is called base oil, but which might end up being drilling fluid, was allegedly fixed from Houston to Dunkirk, France, in the high $70s/t for early May. Nineteen thousand tons of renewable diesel was quoted from Mississippi to Norway. Several traders were pushing 5,000 tons to 6,000 tons of ethylbenzene from St. James, Louisiana, into the Baltic. Further shipments of styrene were seen from Carville, Louisiana, to Rotterdam for the second half of May. Traders are also looking at styrene, ethylbenzene, ethanol, acetic acid and glycol into the Mediterranean.

Several owners are still showing space to Asia for April, with activity far from pre-fire levels. Styrene seems doable, and ethanol is starting to be seen again, mostly smaller lots to Vietnam and the Philippines so far. Aromatics are deemed to be workable too, especially paraxylene. Several slugs of vegetable oil are being quoted to Korea from the U.S. Atlantic Coast and U.S. Gulf. There are also signs of improvement in China in regards to the dispute over genetically modified oil, with expectations that material should start to move soon.

It is reported that 25,000 tons to 35,000 tons of ethanol was booked from Houston to the west coast of India, with the smaller volume seeing low- to mid $60s/t, and the larger quantity fetching very high $50s or low $60s/t, depending upon ports. Between 10,000 tons and 12,000 tons of base oils are mentioned from Paulsboro, New Jersey, to the west coast of India for prompt loading.

Europe

April is turning out to be a busier month for the North Sea and the Baltic route than March was. Base oils have been patchy out of the Baltic, and instead, a large volume is loading for a deep-sea destination. As always there is a scattering of prompt ships around, but by and large the fleet has a moderate amount of forwards employment. There have also been several cargoes that have taken longer to fix than expected, notably some ethanol movements into the United Kingdom, and some of the biodiesel shipments into France took an additional four to five days before fixing. Rates could firm if more business materializes.

Most owners who service the southbound route report heavy contractual nominations, as well as a robust spot market, the proof of which is the number of ships that have no space left in April. Again, fairly straightforward cargoes, such as aromatics, styrene, ethylene dichloride, FAME, caustic and ethanol have all taken longer to cover than usual. On top of these, there have been many other grades that have come into the market such as lignosulphonate, methanol, methyl tertiarybutyl ether, benzene, chlorinated solvents, acetates, vegetable oil and aniline. Several base oil movements have been seen into Egypt, Spain, Italy and Turkey. Rates have the potential to move upwards.

Demand along the northbound route is fairly well-matched to the supply of tonnage. A few isolated prompt positions still exist, and on the whole, rates are unchanged. Pyrolysis gasoline has seen activity from Italy, France and the Adriatic. Caustic was booked to France and the U.K., while a parcel of base oils was covered from Spain to Biscay, France. FAME has been booked in exceptionally large quantities from Spain to Continental Europe.

The West Mediterranean has been pretty prolific in terms of cargo requirements, but the same cannot be said for the East Mediterranean, where urea ammonia nitrate, molasses, vegetable oil and the occasional shipment of caustic and aromatics has occurred, although 3,000 tons of urea ammonia nitrate that was fixed to Savona, Italy, from Damietta, Egypt, looks to be a first for this destination. FAME underpins the market in the West Mediterranean, but not exclusively so, with bookings of caustic, benzene, base oils and methyl tertiarybutyl ether also occurring on a regular basis. Several prompt shipments have popped up, especially out of Spain, where port delays have caused the cancellation and substitution of both contractual and spot cargoes.

The westbound market has been somewhat impacted by the ITC fire. Some vessels had to wait for several days prior to finding other possible storage solutions, and in addition, some of the cargoes that were being shipped to Houston have now found other homes in the nearby ports. There is some methanol and aromatics being quoted westbound that shows some promise for the route, however the freight rates remain quite suppressed on this voyage. It is however the hopes of the owners that the market will pick up now that the American Fuel and Petrochemical Manufacturers annual meeting is over and traders may have some refreshed viewpoints.

The market to the Far East was flat for the duration of last week. April space is just about gone, and it appears that owners are cautious to go on berth for the smaller volumes out there. There seems to be quite healthy levels of spot cargoes having been quoted whilst Contracts of Affreightment volumes were not as high as previous months. Thus, it is expected that this trade lane might pick up the pace and may see an upswing of rates in the weeks to come should the pressure be maintained.

It has been another quiet week to India and the Middle East Gulf. The usual players are present and all have partial space from Europe to India for April to May. Major owners are not reporting any significant changes on this trade lane, rates have been steady for a long time, and have not been dropping, which leaves the route in a somewhat healthy state.

Asia

There is not a great deal of prompt space left within Northeast Asia, with many vessels only showing open positions in May. Contractual business is steady, as is the flow of aromatics from Korea into China, and from Taiwan into Korea. Acetone and phenol are active into China, and there are cargoes of adiponitrile, base oil, acrylonitrile and some export grades from China looking for transhipment.

On the southbound run, several ships are able to offer their last few tanks for completion cargoes, but there is a reasonable selection of cargoes being quoted, both for April and May loading. Possibilities include methyl tertiarybutyl ether, pyrolysis gasoline, heavy aromatics, clean petroleum, base oil, caustic, benzene, orthoxylene, solvent naphtha C9, toluene, acetone, 2-ethylhexanol and ethanol.

Space is relatively tight in the northbound direction, and there were cargoes quoted last week that were around the previous week, with the tell-tale signs of the loading windows having been widened to appeal to more vessels. Parcels of base oil and unconverted oil have been noted, and a couple of large methanol cargoes were booked into China as more methanol to olefins units come back on-stream. The usual parcels of paraxylene, benzene, pyrolysis gasoline, styrene, vinyl acetate monomer and methyl tertiarybutyl ether are also quoted.

Apart from routine spot requirements of paraxylene, pyrolysis gasoline, benzene concentrate and the occasional shipment of fatty alcohol or biodiesel there is not much happening within Southeast Asia.

There is little space left on the transpacific route. Traders are pushing cargoes of 6,000 tons to 9,000 tons of benzene to the U.S. Gulf, and even 40,000 tons of benzene was booked on an April loader in the $40s/t. Base oils were circulated from Korea to the U.S. Gulf and sulphuric acid continues to fix to Chile. Space remains tight to Europe, with numerous small parcels quoted. Benzene had been active earlier in the week but looks to be shifting to India and the Middle East Gulf supply instead. Plenty of biofuels are being worked too.

Another busy week in the regional markets. Some of the cargoes seem to be very hard to cover and have been around for several weeks now. There is a wide variety of parcels, both from the Middle East Gulf, India and also from the Red Sea. Eastbound is producing a steady flow of 10,000 ton to 15,000-ton parcels, with a few larger ones as well. Aromatics from India and the Middle East Gulf are interspersed with slugs of methyl tertiarybutyl ether, methanol, glycols and base oil. Westbound space is scarce, and there are more cargoes of paraxylene and benzene, as well as glycols, methanol and methyl tertiarybutyl ether.

This report was originally featured in the April 17 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.