The Americas market is becoming frustrated by the lack of available December tonnage. Europe is active on the majority of routes. Asia is reasonably busy but gaps can still be found this month.
U.S. Gulf
The hottest route out of the Americas is the U.S. Gulf to Asia trade lane, but there has been relatively little fixing because there is simply not enough space remaining on berth. If anything, it is easier to find space for 2,000 ton parcels than 5,000 ton parcels or larger. Rates currently stand at around $100 per metric ton for 5,000 ton parcels to China, subject to space, and $140/t or so for 1,000 ton pieces. Traders, on the other hand, are looking more at levels in the low $90s/t which is insufficient to attract on berth any of the remaining outsiders that are still around. Furthermore, product availability is starting to become an issue. Styrene, for example, is suggested to be completely sold out for December.
U.S. Gulf to east coast of South America is another route that is lacking December space, but owners are reluctant to commit more tonnage on this route since the northbound route back out of South America is so dismal. Rates are holding steady for now.
U.S. Gulf to India-Middle East Gulf is tight for December space which means that many charterers have decided not to pursue outsider space and most requirements are now on hold until January. Transatlantic eastbound is slow and little material is moving. Even scheduled carriers have space for loading this month. Ethanol is one of the few products under the spotlight. Rates are dropping with 5,000 ton parcels from Houston to Antwerp-Rotterdam-Amsterdam now pegged below $50/t.
Europe
Activity levels remain high in the North Sea and Baltic and many ships are booked through to the end of the month, and in some cases into January as well. Rates are not necessarily much higher, however, and it is possible to achieve unchanged levels from the previous week.
Southbound into the Mediterranean is tight on space until the end of December. Products such as MTBE, benzene, styrene, acrylonitrile, paraffins and base oils have been noted. Rates can be strong in cases where outports are involved, but for common destinations in Turkey, Italy, Spain and France, rates remain competitive. Northbound is attracting a reasonable level of demand and freights are stable or occasionally firmer. Unusually, base oils have been attempted from the Black Sea to Antwepr-Rotterdam-Amsterdam, but the ice season is just starting in the Azov and some of the shallower ports are already reported to be experiencing some weather issues.
Inter-Mediterranean demand is strong and base oils are again being fixed into Turkey. Finding suitable space can be tricky at times and freights are on thefirm side.
Transatlantic westbound activity has dampened as the arbitrage for pyrolysis gasoline have been oscillating and stayed closed most of last week. There are signs that the arbitrage may re-open for end of December shipment. Instead, there are some prompt requirements for acid, urea ammonia nitrate, caustic and even some base oils, but there have been some prompt ships around that have been talking rates around $41-42/t for 5,000 ton cargoes from Antwerp-Rotterdam-Amsterdam to Houston.
Europe to Far East is virtually bereft of space for December loading. Owners are eyeing levels of $105-110/t in order to commit a ship on berth to China. Even January is looking as though it will remain tight on space at this stage. Pyrolysis gasoline is one of the principal commodities, but base oils do feature strongly. Europe to India-Middle East Gulf sees on-going demand for acid, vegetable oil, aromatics, acrylonitrile, ethylene dichloride, pyrolysis gasoline and base oil. Rates are on the strong side due to the scarcity of space.
Asia
There has been a reasonable amount of cargo fixed over the past week in the domestic Asia market. Pyrolysis gasoline has been especially busy into China from Korea and Southeast Asia. All the same, there have been ships around that have been able to mop up these parcels and so freights have not really been stretched. Base oils have not stopped for the end of the year and there have been numerous requirements from Korea and Southeast Asia.
Asia export markets are a little flat for December and freights are on the softer side by a dollar or so. Even scheduled carriers have space back to Europe and the U.S. Looking into January, there are more enquiries for benzene, biodiesel, acetic acid and phosphoric acid that might see freight rates stabilise. It will all hinge on palm oil, but right now, there is not so much demand for it to be shipped.
Asia to India is also slow in terms of palm oil, but busier on parcels such as phenol, acetone, toluene, paraffins, acetic acid and base oils. A typical rate for 5,000 tons of base oils from Korea to the west coast of India would be in the vicinity of low-mid $50s/t.
The route from India to the Middle East Gulf region is much busier for December. Eastbound rates are a touch firmer due to the extra demand. Westbound rates are marginally firmer as well.
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.
