High chemical inventories depress shipping demand for east China

Easy chemicals refer to products that can be easily transported and shipped.

"We fixed some cargoes to be shipped from South Korea to mid-China but had to cancel them as there was no space at the port," the ship broker added.

Freight rates for easy chemicals like aromatics from South Korea to mid-China had already fallen to $20-21/tonne (€15-16/tonne) from mid-March levels of $23/tonne following the drop in demand due to high inventories.

Present inventory levels of MEG in east China were around 550,000 tonnes compared with average levels of 400,000 tonnes, according to global chemical market intelligence service ICIS pricing.

Toluene stocks in east China were 170,000 tonnes against the usual 60,000 tonnes, choking off fresh demand while SM stocks were around 100,000 tonnes against normal levels of around 40,000 tonnes, according to ICIS pricing.

Additionally, the Chinese government prohibited the offloading of dangerous cargoes including chemicals at ports in Shanghai, like Wujing and Gaoqiao, until September due to the ongoing Shanghai World Expo 2010, a broker said, adding that vessel owners were hesitant to go to Shanghai.

Meanwhile other chemicals, like paraxylene (PX) and orthoxylene (OX) were being shipped routinely to China, regional ship brokers said.

($1 = €0.76)

For more information on aromatics visit ICIS chemical intelligence
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