From the start of the year and on
all European movements, spot rates have been on the rise
over the first two quarters. Such a trend has not been seen
for a good number of years, as normally the market remained
steady with slight ups and downs over short periods. This
resurgence came to a halt in June and rates fell back to
their levels at the end of 2002.
The market in North Europe
therefore kept at a reasonable level during the first half,
but there were very few owners who were able to benefit from
the improvement in rates as their contractual commitments
were relatively heavy. At least shipping programmes were
well covered and very few ships had any idle periods.
During the second half of the year
rates fell by 10 to 20% before a slight recovery in October
and November. It should be noted that in this zone nearly
all freights are now calculated in euros, which allow owners
to keep in step with their costs and avoid losses on
currency depreciation, which would have been the case had
the billing remained in dollars.
Mediterranean movements are always
split in two, based on the vessels' age and the quality
criteria required by charterers. The older ships are less
and less solicited in west and central Mediterranean and
generally are to be found further east or in the Black Sea.
None of these vessels show themselves up in northern Europe
where there are strict controls by port authorities. Freight
rates also increased in the first half of the year then fell
back as from the summer to the levels of 2002. No
improvement came later in the period.
On other trade routes, from North
Europe to the Mediterranean and return, the same general
fluctuations took place although on the latter movement the
market was slightly firmer throughout the year.
On movements from the
US to Europe the
market remained stable up until the summer, when it suddenly
took off to reach a peak in August. After a drop-back in the
autumn, the market recovered significantly to finally
overtake the summer highs. Consequently freight rates for
lots of 2,000 tons went from $30 to over $46 per ton and for
sizes over 5,000 tons from $23 to $40 per ton.
The trigger of this improvement
was important movements of styrene, cumene and xylene as
well as exports of small lots of chloric solvents and
On westbound transatlantic
movements, after a spectacular recovery at the end of 2002,
the freight market followed the same trends as for the
US-Europe trade before tailing off in the third quarter, but
stayed firm thanks to some spot activity in the clean
petroleum products market.
As in 2002, the main spot movements
out of Europe were with cargoes of MTBE, methanol and
sulphuric acid. Freight rates for lots of 2,000 tons dropped
from $33 to $31 per ton. Unlike in the past, this sector of
the market was unable to resist the general pressure on
rates and helped cause a more disoriented market between
East and West.
Movements from Europe to Asia gave
a much more contrasting picture, as apart from the months of
June and July, which were affected by the SARS epidemic and
its repercussions, there has been a continuous progression
occasioned by a very strong demand from Chinese buyers.
This market consists primarily of
contract movements with steady volumes in the hands of the
four major chemical carrier owners, who have been able to
occupy their fleet fully, thus preventing any supplementary
space from being used. This situation has had the effect of
leaving very little spot tonnage available, and rapidly
rates in particular for small lots of 1,000 to 2,000 tons
rocketed up with levels going from $60 to close to $70 per
From an overall point of view,
thanks to the good level of contractual nominations and to a
healthy market for specialised chemicals with strong demand
in Asia, the occupancy level of carriers has been excellent
and rates have improved significantly.