U.S. Gulf-to-Europe rates have crept up even further over the course of the week. For example, a 5,000-ton cargo of styrene from the U.S. Gulf to Antwerp-Rotterdam-Amsterdam fixed at $70 per metric ton, and 5,500 tons of phenol and acetone fetched $95/t.

Base oils in the amount of 3,000-4,000 tons going from Houston to Antwerp-Rotterdam-Amsterdam have been booked as well, and are unlikely to have escaped paying a number less than $80/t. There are further cargoes of styrene, cyclohexane, phenol, palm oil and urea ammonia nitrate still to be covered, but some charterers have opted to go to ground in the hope of taking the steam out of the market and to stop freights from escalating further. The base oils to Nigeria still have to fix, but it seems to be more an issue of arranging letters of credit rather than a lack of shipping space.

There is hardly any prompt space left going from the U.S. Gulf to the Far East, but there are a couple of ships that can offer first half of July space. A contest is currently taking place between charterers and owners as to what that space is worth. Owners are of course shooting high, adopting the approach of tight tonnage supply, while charterers argue that the freights are too high to enable the deals to conclude. Rates have perhaps nudged up slightly over the course of the week, but are still short of $70/t for 5,000-ton parcels going from the U.S. Gulf to Mainport Far East. Ethanol, styrene, ethylene dichloride, glycol, aniline and acrylonitrile form the bulk of enquiries these days, while base oils are absent.

Space for spot market requests on routes from the U.S. Gulf to the east coast of South America remains elusive for the first half of July as owners with scheduled ships receive nominations to ship maximum volumes permissible under contractual terms. Ethanol has started to show up from the U.S. Gulf into Brazil which could bring on berth some extra ships that might then have open space. Rates are stable.

Not a great deal has changed on the U.S. Gulf-to-Caribbean route. There are plenty of enquiries but precious few ships, and if a cargo does have to move, then it can become very expensive, such as the case of a 5,000-ton cargo of ethanol going from the U.S. Gulf to the east coast of Mexico which cost $280,000. Normal levels would have been $150,000. It does not seem to have deterred the charterer, who is looking to move a second parcel later this month.

Several ethanol enquiries for product going from the U.S. Gulf to the India/Middle East Gulf region remain uncovered from last week, but space on scheduled tonnage is virtually nil. Parcels of base oil and speciality chemicals continue to look to fill any of the gaps. Rates are notionally unchanged.

Europe

The North Sea and Baltic region continues to be driven by gasoline-related products, but the parcels market is also active – the list of cargoes still needing to be shipped reads like a chemical dictionary with almost every kind of common chemical grade represented. The small clean petroleum tanker sector is pretty busy, too. Base oils, however, have been patchy, especially out of the Baltic.

The southbound route does not appear to be as solid as it once was, although there is still a long list of cargoes needing to be shipped, including base oils, paraxylene, benzene, ETBE, MTBE, methanol, ethylene dichloride, orthoxylene, fatty acid methyl ester, sulphuric acid, vegetable oil, caustic, acrylonitrile and hydrotreated vegetable oil. Nor is there a great deal of space remaining among the scheduled carriers, but some of the occasional callers have nevertheless been prepared to accept lower numbers than usual and this has brought pressure to bear onto rate levels.

Fewer new requirements have come onto the northbound market this week and freights have eased back slightly. Base oils moving in this direction have only been in-house shipments.

The tide appears to have changed in the inter-Mediterranean market, with several prompt positions opening up, even in the West Mediterranean. Although rates have not changed yet, there is a possibility that rates could tilt lower unless a lot more new business materializes soon. Oddly, base oils have actually been a bit more prolific within the Mediterranean this week.

Transatlantic space is essentially tight for June and rates had been expected to increase. Instead, one owner accepted low $40s/t for 5,000 tons of paraxylene from Rotterdam to Charleston, even though the rest of those in the pack were in the upper $40s/t. Consequently, all the other owners became unsettled and this was reflected in the levels seen through the week. A caustic shipment in the amount of 10,000 tons was booked, and 4,800 tons of base oils were fixed from Rotterdam to Houston. Further base oil enquiries include a 16,000-ton shipment from Livorno to Punta Cardon and some small possibilities into Mexico.

Owners report that the list of requirements for shipments to the Far East quoted over the past week is healthier than those in the previous week, but nevertheless, the amount of firm business is pretty thin and there is quite a lot of open space in July. Ethylene dichloride cargo of 10,000 tons was fixed from Stade, Germany, to the Far East in the low $80s/t, but to be fair it was taken as a part-cargo on a ship loading a very high-paying gas cargo. Small parcels of orthoxylene, base oils and speciality grades make up the bulk of requirements, and unless there is more cargo forthcoming, the rates are likely to weaken further.

Rates have also come under pressure on routes from Europe to the India/Middle East Gulf region as the number of ships on berth grows, most of which have small amounts of space available. Some base oils have been considered, but traders do not seem to be expending much energy on them, suggesting that it is only tentative rate-checking.

Asia

Space has tightened across most of the intra-Asian routes. Of particular note has been northbound trade from Southeast Asia. There is virtually no space left for June loading, but there are still numerous requirements being circulated, including some base oils.

Intra-Southeast Asia is also busier. The sentiment seems to be that Indonesian and Malaysian exports and importers have been keen to wrap up as much business as possible before Ramadan. Rates on the northbound and regional routes have showed some strength, whereas southbound numbers are pretty much unchanged.

Slowly but surely the export ships that are on berth for Europe have been able to fill up, and the owners have managed to conclude at rates that are unchanged from previous weeks. The base oil requirements that have been seen are mainly in-house movements. Cargoes to the U.S. are chiefly benzene, mixed xylenes and biodiesel.

Palm oil demand has refused to slow down, in spite of Ramadan and the monsoons that are affecting some ports in the region, such as Mumbai. Rates have been surprisingly firm, touching $40/t at times. It is hard to believe that this trade can carry on at this pace for much longer.

The Middle East Gulf-India region remains very active with far more cargo to be shipped than there is space available. Rates therefore remain strong both eastbound and westbound.

Adrian Brown is a 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 12 0750 7507. In the London office SSYs Ian Roberts can be reached at fix@ssychems.com or +44 20 7977 7560 and in Singapore Jordi Maymi at +65 6854 7127.