The US chemical tanker market rose again for another week as most trade lanes have pushed higher, amid the ongoing tight tonnage situation which has caused rates to soar.

For the US Gulf to South America trade lane, rates are steady as traders are seeking space for Brazil and focused on COA (contract of affreightment) deals. However, higher freight prices seem to be contributing to the softening of spot transactions as many deals fell through due to the higher rates.

On the USG to ARA trade lane, the market was active this week as the ongoing tight tonnage situation for March/April is causing freight rates to surge, especially for smaller parcels.

The market has seen a wide variety of inquiries such as methanol, glycols, styrene, base oils and various chemicals round out the demand leading to higher rates, but only a handful of cargoes are known to be fixed.

For the USG to Asia, space also remains extremely tight as most owners are opting to maximize COA volumes. As a result, spot rates are pressured higher as they are supported by limited availability. Demand seems to be firming due to production issues across the Asian sector as several producers have declared force majeure due to limited feedstocks. It seems that MEG, methanol and ethanol have been the most frequently seen quoted in the market.

The USG to India route has been relatively quiet as most of the cargoes seem to be shipping under COAs. Like the other routes, any of the regular owners who have any available space are offering unattractive rates, making it impossible for charterers. However, one large parcel of MEG was reported to be fixed from the USG to the region for April loading.

Bunker prices ex-USG were higher once again, trending upward along with stronger energy prices.

CONTAINER RATES

Rates for shipping containers from east Asia and China to the US were mostly higher this week, with gains in the mid-single digits percentage.

Rates from supply chain advisors Drewry rose by 4% from Shanghai to Los Angeles, and by 7% from Shanghai to New York.

Drewry said it expects rates to be pressured higher amid the current geopolitical crisis.

Rates from online freight shipping marketplace and platform provider Freightos rose by 1% to the West Coast and by 9% to the East Coast.

Judah Levine, head of research at Freightos, said operational disruptions continue to be limited to Middle East-bound or originating cargo, with some knock-on congestion elsewhere.

“As in previous disruptions like the Red Sea closure, carriers are now adjusting to the new reality and freight is finding its way,” Levine said.

Levine noted that some major carriers like CMA CGM and Maersk are now accepting new bookings by diverting volumes to alternative accessible ports in the region – including ports in Oman, UAE, and Saudi Arabia – with containers moving on by land bridge.

“Carriers are also relying heavily on ports in India with new shuttle services ferrying containers to those accessible Mideast ports – though even some of these, like UAE’s Fujairah are now being directly targeted by Iran,” Levine said.

However, Levine said that for the rest of the container market, while operations are unaffected by the war, container rates are not likely to be spared.

“Carriers have announced flat-rate global emergency fuel surcharges of several hundred dollars per FEU (40-foot equivalent unit) that will go into effect early next week,” Levine said.

Levine said there is skepticism from some market players that the full increases from surcharges will stick.

Rates from ocean and freight rates analytics firm Xeneta were slightly higher compared with the previous week.

Xeneta Chief Analyst Peter Sand said he is seeing exactly what he anticipated when the conflict escalated – port congestion, deteriorating schedule reliability, longer transit times, and surcharges being pushed out across the board.

“Shippers are exploring every available solution to keep supply chains moving without calling at Gulf ports, whether through land bridges, rerouting or alternative networks now being offered by carriers and freight forwarders,” Sand said. “Around 800,000 containers per month used to travel into the region affected by this crisis. Those goods still need to reach customers, and the industry is finding different ways to make that happen.”

Lars Jensen, president of consultant Vespucci Maritime, said many of the announced rate increases were only to take effect from mid-March, hence not necessarily captured in the index rates yet.

“But this could also be a sign that perhaps the global strengthening is not as forceful, except for cargo to/from the Gulf area,” Jensen said.

Rates on the New York Shipping Exchange Freight Index (NYFI) rose by 1.3% to the West Coast this week and fell by 1.1% to the East Coast while rates on the Shanghai Containerized Freight Index (SCFI), which tracks rates for containers leaving Shanghai, edged slightly lower.

Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers.

They also transport liquid chemicals in isotanks.