Global chems shipping rates under pressure on weak demand

09 January 2009 14:09  [Source: ICIS news]

LONDON (ICIS news)--Chemical shipping freight rates across all regions were under pressure due to fewer cargoes and a plethora of available vessels, players said on Friday.

In Europe, the southbound leg between Rotterdam and west coast Italy was heard at around $40/tonne for 2,000 tonne easy chemical cargoes, down from around $45/tonne before the Christmas period.

There was an even greater rate of depreciation in the opposite direction, according to players using the route, with 2,000 tonne easy chemical cargoes at around $35/tonne, down $7/tonne from the end of December.

In the transatlantic market, falling rates were highlighted by one broker who was working small quantities westbound on a regular basis.

“At the start of December a 1,000 tonne easy chemical cargo from Rotterdam to Houston was priced at offers around $90/tonne. This fell to $80 by the end of December and now stands at $70/tonne,” the source said.

For the same quantity and route another trader reported rates even lower in the low $60s/tonne.

Some ship operators said they were seeing more cargoes in January than December, although most market players said this was not the case.

Accordingly, 2,000 tonne easy chemical cargoes were in a range of $50-54, down by $7/tonne from December, while 5,000 tonne cargoes were at $36-39/tonne, down by $5/tonne. 

The eastbound leg also fell by $5/tonne for both 2,000 and 5,000 tonne cargoes to levels of $30-35/tonne and $50-55/tonne, respectively. 

Despite brokers noticing more activity from Rotterdam to the main ports in the Far East, particularly for benzene, toluene and xylenes (BTX), glycols and baseoils cargoes, freight levels were reducing on a daily basis, sources said.

“A 5,000 tonne BTX cargo from Rotterdam to a main port in the [Asia Pacific] has dropped by $5/tonne over the course of a few days from $70/tonne to the mid $60s/tonne,” one broker said.

“A 1,000 tonne cargo is now available at $80/tonne which is a reduction of around $20/tonne from December,” another broker said.

The expectation amongst chemical shipping players would be for the downward trend to continue as the supply/demand ratio for both cargoes and vessels remained out of kilter.   

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By: Dan Horlock
44 20 8652 3214

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