Rates have been immobile on virtually every U.S.-based trade lane, chiefly because there has been no pressure either way to cause them to change.

U.S. Gulf-to-Far East had been looking rather promising prior to Easter, but since then there has only been the occasional paraxylene cargo fixed, along with some ethanol and smaller parcels of acrylonitrile, but not really much else. All the main players still have space in May, and there are a couple of prompt loaders willing to snap up whatever is available. Rates are still in the vicinity of low $70s per metric ton for 5,000 ton parcels into China. If the market stays like this and no new cargoes appear, then these levels will undoubtedly come down.

U.S. Gulf to India-Middle East Gulf is quiet and there is ample space for most requirements. Rates have already slipped to low $90s/t for 5,000 ton parcels, but could keep going down.

Transatlantic eastbound has at least enjoyed some activity with styrene and benzene. A number of styrene parcels were booked, which revealed numbers to still be in the upper $40s/t for 5,000 ton parcels from Houston to Rotterdam.

The route from the U.S. Gulf to the east coast of South America is steady. There have been mutterings of ethanol to possibly move from the U.S. Gulf to Brazil, but few traders are willing to take a gamble this close to start of the Brazilian ethanol season when Brazil traditionally floods the market with its own ethanol. Rates are holding at around $70/t for 5,000 ton parcels from Houston to Santos.

U.S. Gulf to Caribbean is also slow.

Europe

It has not been an easy week for ship owners with tonnage open in the North Sea and Baltic, and there are a number of well-established owners who have prompt open space. With another long weekend looming (May 1, known as May Day, or International Workers Day, is a public holiday throughout much of Europe), space could become even more plentiful and rates may collapse.

Southbound into the Mediterranean is one of the stronger routes in Europe and there is still a steady stream of cargoes to employ most of the fleet. Base oils, however, are not that commonplace, with the majority of enquiries being for producers or term supply.

Northbound has interestingly produced some base oil requirements too.

Inter-Mediterranean business has suffered not only from the long Easter holidays but also from additional public holidays in countries such as Turkey and Italy. However, on the whole, ships are managing to fix ahead, and while there may appear to be a lot of prompt open ships, there is also healthy demand for tonnage and most of these ships do have alternatives.

Transatlantic westbound has not been a complete flop either, thanks chiefly to paraxylene shipments to the U.S. and Canada. Pyrolysis gasoline, mixed xylenes, sulphuric acid, cumene and urea ammonia nitrate are also present. Rates are steady in the mid-to-high $40s/t for 5,000 ton parcels from Rotterdam to Houston, but some owners are now seeking levels of over $50/t.

Europe-to-Far East is somewhat quieter, and part-cargo space is being pushed by some of the regular players. In addition, there is a growing list of potential candidates who could go on berth. Both factors are having an unsettling effect on rates. So far, nothing has been proven at lower levels, but it is only a matter of time that 5,000 ton parcels from Rotterdam to Mainport Far East will come down from the $110-115/t figures to closer to $100/t. Base oils are not really being seen on this route, although there has been some interest in shipping cargoes to India and the Middle East Gulf. Here too, there is prompt space and numbers are likely to become more competitive.

Asia

It has been a dismal week in the domestic Asia market. Chinese demand appears to have evaporated and is particularly noticeable in the intra-Far East routes, with hardly any aromatics being shifted from Korea to China, for example. Owners have been left with end-of-April tonnage, and there are plenty more ships that are seeking employment from early May onwards. Rates have started to slide, with 3,000 ton parcels from Ulsan to mid-China now fetching low $20s/t, even for base oils (excluding Yangtze discharge).

Northbound has been slack too, and it is only in the intra-Southeast Asia trades that rates have remained unchanged.

Asia export has also calmed down sensibly, with fewer benzene requirements to the U.S. Moreover, there is a handful of larger medium range-sized chemical tankers still open in Korea up to mid-May that are willing to show keener numbers for bigger slugs of cargo, and levels in the $50s/t may be achievable, rather than the $60s/t that have prevailed for the past couple of months. However, there are relatively fewer smaller ships around that are willing to take the 2,000-3,000 ton parcels to places like Turkey, so whilst the arbitrage for base oils looks more attractive from Asia to Europe or the U.S., it pays to stick to main routes and not try to be too ambitious in choosing where to place the base oil. Outport business still sees rates of $130/t or thereabouts for these kinds of volumes.

Palm oil demand is supposed to be picking up, at least if we are to believe the statistics. Moreover, volumes into the Indian subcontinent are supposed to increase in advance of some of the notable public festivities.

The Middle East Gulf-India region is reasonably active. Certainly the regional trades seem to be keeping ships busy, but there is a feeling that since imports into the region have been slack then so too are there fewer ships looking to position themselves back out again afterwards.

Westbound has seen the regular flows of products such as methanol, vinyl acetate monomer, acetone, ethanol and glycols and there is not a lot of space remaining for part-cargoes. Rates are steady.

Eastbound has been a little slow, but owners seem content to pick up what they can in the regional trade and not rush back to what has become a quiet domestic market.

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 Panos Giannoulis can be reached at fix@ssychems.com or +44 20 7977 7538 and in Singapore Jordi Maymi at +65 6854 7127.