Shipping report: High US-Asia demand

23 December 2002 00:00  [Source: ACN]

A rush to liquidate USinventories is behind a liquids demand surge as propylene rates move up sharply

Liquids

US to/from  Asia: Demand for vessel space from the US to Asia was extremely strong as producers rushed to liquidate their inventories ahead of the New Year. Freight rates went up by US$3-5/tonne from November.

Enquiries for moving styrene were especially strong. Some 70-130 000 tonne had been lifted from the US Gulf Coast (USGC) to Asia in three waves of about 40 000 tonne each, with the cargoes due for arrival in mid-January and February, with some quantity scheduled to be unloaded in March.

The freight rates for these cargoes were generally settled in late November and early December at US$35-40/tonne, with rates subsequently moving up to US$45/tonne from mid-December. However, a 10 000-tonne fixture to China was agreed at US$60/tonne in early December.

Contract volumes dominated shipping activity to and from the US West Coast (USWC), with shipowners wanting US$65-70/tonne to Asia for a 5000-tonne spot shipment.

Arbitrage from Asia to the US was limited by space constraints as most tankers were fully booked to move contract cargoes. One 5000-tonne fixture of easy chemicals from Japan to the USGC was settled in the high US$30s/tonne. Freight costs to the USWC were at US$35/tonne for a 5000 tonne parcel.

NEA to SEA: The freight rate was unchanged from November, although demand for space had improved. A charterer shipped 2000-3000 tonne of easy chemicals from Taiwan to Vietnam in early December at US$23/tonne, while a 5000-tonne parcel of BTX from South Korea to Indonesia was decided at US$16/tonne. A trader reportedly moved 1000 tonne of monoethylene glycol (MEG) from South Korea to Singapore at US$34-35/tonne.

NEA intratrade: Much of the traffic was to China, with one 2000-3000 tonne fixture of BTX from South Korea to Shanghai, China, closed at US$15-17/tonne, up US$2/tonne from November. The increased rate was due to snug space availability.

From South Korea to southern Chinese port cities like Guangdong, the freight rate for a 2000-tonne parcel was quoted at US$27/tonne, and to Tianjin, in northern China, at US$15-17/tonne.

Several 3000 tonne cargoes of styrene were shipped to Taiwan from South Korea in December at US$15-16/tonne, higher by US$2/tonne compared with November.

In the case of Taiwan-China cross-strait business, freight rates had gone up by US$3/tonne from November, with a 2000-tonne confirmed fixture settled last week at US$23-25/tonne.

SEA to NEA: There was limited activity on this route in December, with shipping rates generally holding steady from November. A producer shipped 5000 tonne of BTX to customers in Taiwan and South Korea from Thailand at US$20/tonne. In the case of exports from Indonesia, a 1000-tonne BTX parcel to South Korea was settled in the high US$20s/tonne.

SEA intratrade: Spot movements were few and far between as most vessels were deployed to move fixed-term cargoes. There was hardly any traffic to and from Thailand, while spot deliveries from Kerteh, Malaysia, were also negligible.

A 2000-tonne cargo of MEG from Singapore to Indonesia was agreed at US$21-22/tonne, unchanged from November. Another 2000-tonne parcel of MEG, from Singapore to Jakarta, Indonesia, was shipped out at US$19-20/tonne.

Europe to/from Asia: Freight rates from Europe moved up due to reduced supply on this route as a result of the tonnage needed to move US styrene to Asia.

Rates, which were in the US$50s/tonne in November, rose to about US$60/tonne for an 18 000-tonne lot.

Traders moved 400-1000 tonne of phenol in December to Asia in the mid-US$60s/tonne, while parcels of up to 5000 tonne of aromatics to SEA were heard settled in the mid-high US$40s/tonne.

Contract volumes dominated traffic from Asia to Europe.

Gases

Ethylene: One of the few confirmed spot transactions involved a 3000-3300 tonne cargo from Singapore to Indonesia, which was settled in the low US$30s/tonne. Shipowners said the freight rates had hardly moved from November.

However, there had been a fair amount of activity from NWE and the Mediterranean with shipping costs for lot sizes of 5000 tonne reported at US$165/tonne and US$140/tonne respectively.

European shipowners said demand for space to move cargoes to Asia on vessels of 8000-20 000 dwt (dead-weight tonne) was especially strong, and that freight rates could go up if the enquiries persisted into January.

Propylene: Charterers and shippers said freight rates had moved up from US$120-130/tonne in October/November to US$140-145/tonne in December for shipments from the USGC to Asia for lot sizes of 4000-9000 tonne. They attributed the improvement in the freight rate to snug space availability in the US, and strong demand in Asia due to short regional supply.

Charterers reported a marked increase in liquefied petroleum gas shipments from South Korea, with the cost of freight to China up from the low US$40s/tonne in November over US$50/tonne. Propylene shipments to SEAfrom NEAwere up by US$10-20/tonne to US$60/tonne.

Butadiene:Contract volumes dominated shipping business with both charterers and shippers reporting no spot transactions. There had been virtually no shipments out of Asia, and none from the West to Asia.

VCM: The market was also almost entirely dominated by contract volumes. There were no reports of any spot movements.

Ammonia: An Indonesian supplier moved 15-20 000tonne to a buyer in Taiwan in early December at US$25-30/tonne, up US$3/tonne from November. From the Middle East, a 35 000-tonne fixture to South Korea was agreed in the mid-US$50s/tonne, while another 15-20 000 tonne parcel to India was settled at US$23-27/tonne. A 30-35 000 tonne lot from the Black Sea to NEA was reportedly also moved at US$63-67/tonne.

Chemical shipping rates - US$/tonne

Product	Route	Rate range	Tonnage	Lifting
Liquids
Aromatics	Taiwan/China	23-25	2000	December
BTX	S Korea/Shanghai, China	15-17	2000-3000	December
BTX	Thailand/Taiwan	20	5000	December
Easy chemicals	Japan/US Gulf	high 30s	5000	December
Glycol	Singapore/Indonesia	21-22	2000	December
MEG	Singapore/Indonesia	19-20	2000	December
Phenol	NWE/S Korea	mid-60s	400-1000	December
Styrene	US Gulf/S Korea	45	40 000	December
Styrene	NWE/S Korea	60	18 000	December
Gases
Ethylene	Singapore/Indonesia	low 30s	3000	December
Ethylene	NWE/NEA	165	5000	December
Ethylene	Mediterranean/Asia	140	5000	December
Propylene	USGC/Asia	140-145	4000-9000	December
Ammonia	Indonesia/Taiwan	25-30	15-20 000	December
Ammonia	Middle East/S Korea	mid-50s	35 000	December
Ammonia	Middle East/India	63-67	15-20 000	December
Ammonia	Black Sea/NEA	63-67	30-35 000	December

The freight rates contained in this report are obtained by the ACN team through consultation with shippers, shipbrokers and charterers. They are a guide to recently agreed shipping rates. Chemicals requiring stainless stell tanks will be charges a premium.

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly