FocusMideast-to-NE Asia freights may rise on tight supply of vessels

09 March 2012 09:16  [Source: ICIS news]

By Lester Teo

SINGAPORE (ICIS)--Freights for prompt shipment of chemicals from the Middle East Gulf (MEG) to northeast (NE) Asia may see a slight increase in April because of tight availability of vessels, market sources said on Friday.

Freights for 10,000 tonnes of easy chemicals from the MEG to NE Asia were assessed at $48-50/tonne (€36-38) on 2 March, according to ICIS.

Easy chemicals refer to cargoes that do not require special requirements, like heating or nitrogen purging/blanketing after the cargo is loaded into the vessels’ tank.

A shipping enquiry for an April shipment of 10,000 tonnes of easy chemicals from the Arabian Gulf (AG) to northeast (NE) Asia surfaced on Thursday but there were no discussions heard as at Friday.

“Availability of spot vessels from the Middle East is tight and there are many vessels in India now. Hence, we have not managed to book a vessel,” the charterer said.

Freight should be slightly higher to offset current higher bunker fuel prices, said a chemical tanker operator with regular services from MEG to NE Asia.

“We would indicate freights at the $50-55/tonne range for a 10,000-tonne cargo of easy chemicals from the Middle East to northeast Asia for April shipment,” the operator said.

Good demand for contract of affreightment (CoA) shipments, as well as weak palm oil exports from southeast Asia to India and Middle East between January and March, contribute to the tight availability of prompt vessels.

“Demand is good for CoA shipments from the Middle East to Asia and we have limited vessels space for prompt shipments,” a southeast Asian chemical tanker operator said.

CoA is a binding contract between the shipper and carrier to transport a large volume of specific cargo over a period of time between agreed ports or regions, at a fixed rate as spelled out under the terms and condition of the contract.

Palm oil freights from southeast Asia to the west coast of India were last assessed at $29-30/tonne for a 10,000 tonne cargo of palm oil on 2 March, according to ICIS.

“The weak palm oil freights from southeast Asia to the west coast of India between January and March was a contributing factor and there were lesser vessels booked to Middle East and India because of the weak export,” a shipowner said.

($1 = €0.75)

By: Lester Teo

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