Brazil-Europe ethanol freight rates set to fall

03 November 2008 15:53  [Source: ICIS news]

PARIS (ICIS news)--Shipping rates for ethanol from Santos in Brazil to Rotterdam will fall dramatically over the next six months on lower volumes, a specialist Rotterdam based logistics source said on Monday.

Speaking to ICIS news on the sidelines of the FO Licht World ethanol conference, the logistics firm said that as trade volume slowed shipping firms would compete more aggressively for cargoes, lowering their freight rates if necessary to win business.

“It’s better for shippers to have the cargo, even if it is not at such a good rate, rather than not to be running,” said the source.

Ethanol shipments from Brazil to Europe have been predicted by traders to fall going into the next year as Brazilian domestic demand grows and profit margins for selling into Europe fall.

“A couple of years ago it used to be the Brazilians coming to us,” said a European trader, “but now we have to go to them.”

Fuel ethanol freight rates are currently around $70-80/cubic metre for a 2,000 tonne cargo from Santos to Rotterdam, according to market sources. Bunker fuel prices are also expected to fall in 2009 pushing rates further down.

The conference runs from 3-6 November.

Bookmark Simon Robinson's Big Biofuels Blog for some independent thinking on biofuels
To discuss issues facing the chemical industry go to ICIS connect

By: Rachel Howat
+44 20 8652 3214

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