Summer lull lingers as spot markets slumber

09 August 1997 00:00  [Source: ICB]

The end of the summer has yet to impact on shipping rates as liquid chemical spot markets remain becalmed.

Shipping rates for liquid chemicals remain depressed, with spot markets still to come out of the summer doldrums.

Baltic routes have died down from the spurt of activity in August, although shippers expect a revival mid-month. Plants are down for summer maintenance. Cargoes of 1500 tonne MEG from Kotka to Rotterdam and 1000 tonne paraxylene from Kotka to Antwerp were each fixed at $24/tonne for September.

North Sea reports are mixed. Some players report strengthened business from the second half of August after some idle days early in the month. Others say the summer lull is still under way and hope for a recovery mid-September. They claim ships normally filled two to three weeks ahead are booked only five to seven days in advance. Rates are nevertheless holding steady. Some 5000 tonne of caustic soda was fixed in late August from ARA to west central Sweden at $18/tonne.

NWE-Mediterranean routes have seen a drop in spot trading although contract business is holding out. A cargo of 2000 tonne easy chemicals from Rotterdam to southern Spain was fixed at $32/tonne, and 3000 tonne surfactants was fixed from Italy to Rotterdam in the low $30s/tonne, both in September.

Intra-Mediterranean players report a drop off in activity as prompt spot business is quiet. Contract business remains healthy. Rates have still to react to the fall in spot business. A cargo of 3000 tonne of aromatics is fixed for loading from Turkey to the Adriatic in the low $20s/tonne, and 1000 tonne easy chemicals from Haifa to Bourgas in the mid-high $20s/tonne for September.

Europe-Far East trading activity has stalled, although contract business is holding firm. A cargo of 4000 tonne aromatics was fixed for end August loading from Rotterdam to West Coast India at $49/tonne. Another of 5000 tonne orthoxylene was fixed for llifting in Rotterdam in September for Mumbai at $50/tonne.

US Gulf-Far East volumes and rates are steady, with space fully booked for the first half of September. A range of cargoes is reported, with strong trading in EDC and easy chemicals. Orthoxylene is moving to India.

Transatlantic rates have been steady in August and are holding up for September with ships full for most of the month. A 4000 tonne easy chemicals parcel eastbound is quoted in the mid-$40s/tonne. Westbound, small business in easy chemicals and 2-EH is reported. A cargo of 8000-9000 tonne easy chemicals was fixed for Houston-Rotterdam in September at $61/tonne. Business overall is quiet with rates in the mid-$30s/tonne. A 2000-3000 tonne aromatics parcel from Italy to Mexico is quoted at $55/tonne.

An absence of cargoes is subduing freight rates for petrochemical gases. However shipowners say the effect is being moderated by a slight recovery in ammonia and LPG trade.

The pickup in LPG trade has prompted a recovery in rates, particularly on large-sized cargoes. Quotes for 40 000 tonne cargoes Arab Gulf-Japan are now quoted in the low $30s/tonne. This compares with rates in the high $20s/tonne for mid-August liftings. Rates on small to medium-sized vessels are lagging but are expected to recover in line with improved seasonal demand. A cargo of around 8500 tonne for September lifting in Yanbu for the Mediterranean was fixed in the $30s/tonne.

Ethylene trade is quiet transatlantic with European supply and demand balanced. A late August fixture of 4000 tonne from Houston to NWE at around $100/tonne compares with rates earlier in the year of $120/tonne. With shipowners' prices ideas in the low $90s/tonne, rates are expected to soften further.

Propylene spot trade, which had focused on moving Brazilian material to Europe and the US over recent weeks, has dried up. Shippers say falling propylene prices, particularly in the Far East and Europe, has closed any margin for freight on deepsea business. More vessels are competing for short haul business as a result.

Butadiene continues to move transatlantic from Europe to the US. A vessel was fixed to lift 5500 tonne in Moerdijk end-September for the US in the low/mid-$70s/tonne, reportedly for Shell. Standard cargoes of 2000-3000 tonne were being fixed higher in the low $80s/tonne out of the ARA but market sentiment is bearish.

VCM exports from the US to Southeast Asia are under pressure from low Asian VCM prices. Rates are softening with charterers trying to press for under $100/tonne on US-Southeast Asia routes but owners holding out for above this level. Turkey is enquiring for 5500 tonne for end-September delivery. A recent tender for 15-25 August delivery was awarded to the US but freight was not disclosed.

Ammonia shippers report a recovery in freight rates in line with firmer fob prices. Reduced supply from Algeria and Ventspils due to planned maintenance turnarounds is keeping supply tight although shippers report increased volumes available from Yuzhnyy in September. Rates out of the Arab Gulf are in the $30s/tonne for shipments to India and around the mid-$40s/tonne for Aqaba, Jordan.

SELECTED TANKER FIXTURES
Liquids	Tonne	Route	Rate	Date
Easy chemicals	1100	Rotterdam/Santos Aratu	78	1 September
Phosphoric acid	15 000	Aqaba/Tuticorn	31	1-2 September
Phosphoric acid	13 500	Gabes/West or East India	40	3-10 September
Xylene	3000	Skikda/Porto Marghera	24	3-4 September
Benzene	5000	Aratu/Rotterdam	38	3-4 September
2-EH	2000	Rotterdam/Far East	70	14-17 September
MEG	3000	Rotterdam/Far East	70	13-16 September
Methanol	28 000	2xBaltic/USAC or US Gulf	21	1-10 September
Methanol	15 000	Hamina/US Gulf	288	12 September
MTBE	15 000	Rotterdam/USAC	15	16-17 September
Solvents	1000	Southern Spain/Ulsan	100	27 September
Gases
LPG	8500	Yanby/Leghorn	27	1-5 September
LPG	11000	Yanbu/West Med	high 20s	20-25 September
Ethylene	4000	Houston/NWE	100	25-30 August
Ethylene	3500	BIK/Merak	100	20-25 August
Propylene	3000	Sta Clara and Rio Grande/ NEW	mid-90s	early September
Propylene	4000	Aratu/NWE	low 70s	14-20 August
Butadiene	2000	ARA/US Gulf	low 80s	early September
Butadiene	2000-3000	Brindisi/US Gulf	mid-90s	10-15 September
VCM	9000	US Gulf/Far East-Southeast Asia	105	early September
Ammonia	35 000	Yuzhnyy/Korea	60	10-15 September
Ammonia	12 000	Arab Gulf/India	30s	early September
Ammonia	15 000	Arab Gulf/Aqaba	mid-40s	1-5 September
Rates given in US dollars unless otherwise stated

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