Cargoes such as styrene, which is scarce in Asia, paraxylene, orthoxylene and mixed xylenes have all been fixed over the past week, some for October and some for November. Rates have lifted for 5,000 ton cargoes from Houston to main Far East ports to the high $50s/t, and some owners feel they can achieve this level for 10,000 ton cargoes.

Transatlantic eastbound is the other route where trade has grown. There has been a steady volume of ethanol being fixed to Europe, and this has been supplemented with cargoes of styrene and biodiesel, the rates for which have been fixed at around $50/t for 5,000 ton cargoes. Volumes are rather flimsy however, and owners will need further quantities if they are to hold onto these rates.

Of the other main trade lanes, Gulf-to-Caribbean is really very quiet with little movement reported. Spot activity on the Gulf-to-east coast of South America route is almost nonexistent, and there is some November space available on scheduled sailings. Rates are around $60/t for 5,000 ton parcels from Houston to Santos.

Some base oil exports have been taking place from the U.S., such as into the Mediterranean, although at $70/t for 5,000 ton parcels this is unlikely to be repeated, especially since Turkey is no longer a prime target for traders. Some material has also been exported to West Africa and some small pieces into the Caribbean.

Europe
The amount of spot market business posted on the North Sea and Baltic markets has been minimal. Some owners are seeking ways to send ships down to the Mediterranean to avoid entering the rate war that has erupted and which has seen something like a 10 percent devaluation of freights.

Cargoes that were being fixed at 55,000 lump-sum, for example, are now going for less than 50,000. Even with bunker prices being slightly lower, such levels will ensure the owners continue to make a loss on each and every cargo shipped.

Southbound into the Med does provide some respite, and there is a wide selection of material to transport. Rates are fairly solid too, although there has been a bit less biodiesel being shipped, perhaps because of the decision by the Spanish authorities to allow the import of biodiesel from Argentina and Indonesia to recommence. The trade in base oils into Turkey has also diminished due to the changes in the way import duty is collected, although this should not be a permanent barrier.

Northbound trade from the Med is slow from the West Med but a bit more active out of the East Med, reversing recent trends. Inter-Mediterranean markets too have slackened, and there is quite a lot of open space in the West Med.

Transatlantic westbound sees slightly stronger freight rates on the back of arbitrages for benzene and paraxylene. Based on what has been booked, rates are now at around $43 to $44/t for 5,000 ton cargoes from Rotterdam to Houston.

Demand is weak on the Europe-to-Far East service, and there are still ships that need to complete within October. Owners are willing to accept a reduction on freight levels that has seen low $80s/t being booked on 5,000 ton cargoes from Rotterdam to main Far East ports.

Europe-to-India and the Middle East Gulf is unchanged, thanks to a resurgence in trade in phosphoric acid and vegetable oils. Base oils however are absent from almost all routes going east of Suez.

Asia
It has been a reasonably busy period again within the domestic Asia markets, and the lack of prompt open positions is testimony to the amount of trade being conducted. It is still not up to full speed however, but in the circumstances it is one of the better places in the world for ship owners to keep tonnage. Base oils have gone through a leaner phase within the region, with possibly fewer than normal shipments being recorded.

Asia export business however has seen a few base oil enquiries to the U.S., along with cargoes of aromatics. Europe is attracting a flood of smaller chemical parcels, as well as biodiesel and of course palm oil, the rates for which are stable-to-firm on the long-haul routes, while rates to India have risen even higher. In some cases, we have seen levels in the mid $40s/t being achieved for 10,000 to 12,000 ton cargoes of palm oil to the west coast of India, which is a jump of $5 to $6/t.

The Middle East Gulf-India region is still active and there are not that many vessels fully open with nothing to do. Eastbound boasts a variety of cargoes, including paraxylene, glycols, canola oil, ethanol, styrene, benzene and methanol.

Base oils from the region are really only in evidence on the westbound service, with cargoes quoted into the Med from both India and the Middle East Gulf. Space is fairly tight in this direction, and rates talked are back into the mid $60s/t to mid $70s/t for 5,000 ton parcels, depending upon the ports involved.

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 at fix@ssychems.com or by phone at +44 1207-507507. In the London office SSYs Jordi Maymi can be reached at fix@ssychems.com or +44 20 7977 7560.