Even with the extended holiday weekend, European and Baltic markets saw enquiries over the past week, an encouraging sign. Elsewhere, the oversupply of tonnage continues to drag rates down in Asia, India and the Middle East Gulf. The United States remains snug on space, with stable rates, though with bunkers seeing some recent increases, this bears watching.
U.S. Gulf of Mexico
Space is generally seen as tight regardless of trade lane, with the U.S. Gulf-to-Asia and U.S. Gulf-to-Europe routes continuing to be snug. While spot activity has not been seen in abundance, some of the slack space in the U.S. Gulf, Caribbean, and east coast of South America appears to have been taken up with the increase of ethanol from Brazil and the continued shipments of biodiesel from the Plate to Northwest Europe and Mediterranean destinations.
We feel that 1,500 tons of base oils could be worked from the U.S. Gulf to the east coast of Mexico for around $39/t, while a 5,000 t parcel of base oils from Houston to northern Brazil would cost around $45/t.
Some mid-June space should be available for small parcels to West Africa or the west coast of India. As space continues to be very tight, larger parcels would likely result in the need to ballast a ship into the U.S. Gulf from the Caribbean or even from West Africa.
Space continues to be nearly nonexistent until the second half of June from the U.S. Gulf to Asia, and a rate in the high $80s/t should work in principle for a 5,000 t cargo from the U.S. Gulf to scheduled principal ports in China, subject to timing.
Eastbound transatlantic remains firm, and depending upon loading port and timing, a parcel of base oils would cost around $50/t.
Europe
Increased inventory levels in the Baltic and Black Sea provoked a bit more chatter in the European markets last week, though few cargoes were concluded, possibly due to the holiday-shortened work week. With contractual volumes remaining at strong levels, the barometer cargoes referenced in recent reports continue to be seen quoting less available spot tonnage, helping to keep rates firm to most locations. Some prompt tonnage does exist, however, for firm cargoes.
Deep sea markets from Europe are seen to be a touch stronger, with transatlantic holding firm, and 3,000 t of base oils from Rotterdam to Houston should be around $45/t as part-cargo space remains available.
Space to Asia remains tight, and that same 3,000 t base oil cargo will be more than double, costing well in excess of $100/t if shipped from Rotterdam to Korea, for example. India and Middle East Gulf shipments continue to draw keen interest along the full scope of products.
Asia
Outbound cargoes from Asia have begun to show a little life, with additional benzene having been seen shipping to Europe, though there still doesnt seem to be enough to offer much assistance to ship owners looking to leave the region.
While palm oils to India are still being seen in the low $20s/t for 8,000 t to 10,000 t lots, and caustic soda is seen as active into India, owners are hoping to find some additional employment outbound from there that has so far been lacking to any large degree.
While much of the inter-Asian chemicals market is seen as soft due to a variety of plant outages and pricing schemes, some niche opportunities exist to provide some reasonable employment. For those wishing to send base oils out from Asia, there are a great many opportunities, with no destination believed to be out of the question.
Adrian Brown, senior market analyst for chemicals and base oils with SSY Shipbrokers, London, is away this week. Information about SSY can be found at www.ssyonline.com. Adrian Brown, in the U.K., can be reached directly at research@ssy.co.uk or by phone at +44 1207-507507. In the U.S., SSYs Steve Rosenthal, can be reached at fix@ssychems.com or +1 203-961-1566.