Lack of demand in Europe, US keeps ships in Asian ports

20 April 2009 13:24  [Source: ICIS news]

LONDON (ICIS news)--Many ship owners’ vessels are stuck in Asian ports due to the lack of demand from Europe and the US, sources said on Monday.

“We are on the verge of a crisis in Asia because there are so many vessels looking for cargoes that do not exist,” one broker said.

The firm route from Europe to Asia-Pacific had encouraged many ship owners to look to Asia to escape the doldrums of their respective markets. But the problem of overcapacity in the shipping market has now spread to Asian ports.

“Finding suitable cargoes from the Asia-Pacific to the European continent or the US Gulf is a big problem due to the amount of vessels competing for very little availability. This has forced freight levels down, which makes it even harder for ship owners stuck in the region,” one Spanish broker said.

As a result, some ship owners were avoiding the region, as brokers reported having cargoes that were not covered for prompt loading.

“Ship owners are hesitant to go eastbound due to the state of the market in the region,” one British broker said.

Another broker said that he had around 15,000-17,000 tonnes of easy chemicals from Europe and the Mediterranean to southeast Asia that were loading in mid-May and still needed to be covered. 

Ship owners that were willing to head east were understood to be charging a premium for available space at $125/tonne (€96/tonne) for 2,000-tonne parcels, some sources said.

“Odfjell [is] pushing up the market for their last space, and Tokyo [has] ideas of $130/tonne from Rotterdam to Ulsan for 1,000-tonne cargoes,” one broker said.

According to global chemical market intelligence service ICIS pricing, 2,000 tonne-shipments from Rotterdam to Taiwan are at levels of $95-100/tonne. 

Despite the problems associated with leaving Asia, vessel space was noted as being very tight until early May, sources said.

One broker believed that as long as the Europe-to-Asia-Pacific route remained firm, owners would continue to head eastbound.

“We have not seen such problems and owners are still keen for cargoes we have looked at, so it’s not been an issue here,” the broker said.

($1 = €0.77)

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By: Dan Horlock
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