Asia chemical freight rates low on weak demand

29 May 2008 09:52  [Source: ICIS news]

SINGAPORE (ICIS news)--Chemical freight rates have remained depressed for the past month due to weak demand from Asian charterers, industry sources said on Thursday.

"Enquiries for chemical tonnage has been weak for sometime in northeast (NE) Asia, especially from Chinese charterers," a broking source said. "We have been trying very hard to get business but not much is going on."

With crude prices rising phenomenally and bunker oil values following suit, ship owners were under pressure to increase freight rates, a broker said.

US crude oil futures surged to a fresh record high above $135/bbl last week. Massive profit taking knocked them to around $128/bbl. It rebounded more than $2/bbl to hover around the $130/bbl mark.

This week, Singapore bunker 380-CST fuel oil surpassed the $600/tonne, hitting a high of $639/tonne.

Chemical freight rates in Asia had remained largely unchanged since late April.

Freight rates for 2,000 tonne easy chemicals were flat for the past month, with prices for the voyage between South Korea and Singapore pegged at $39-41/tonne and at $38-41/tonne for the South Korea-Bangkok route.

Rates for the South Korea-Taiwan route were seen stable at $27-28/tonne while the rates for the journey to Shanghai journey had softened by $1/tonne to $23-25/tonne.

Freight rates for the Singapore to Bangkok journey were assessed unchanged at $25-26/tonne and at $26-27/tonne for the voyage between Singapore and Jakarta.

"At this rate, we will be seeing more blood later as some of the ship owners will just close down," another source added. "Business has been so bad that the recent earthquake in China will not affect any of the schedules even if there are any."

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By: Desmond Chia
+65 6780 4359

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