Lack of petchems trade causes 25% cut in shipping freight costs

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

31 Oct 2008

A drop in trade in the global petrochemical markets has forced some deep-sea shipping route costs to be reduced by as much as 25%, an aromatics trader said Friday afternoon. The trader said: "There are not enough cargoes (on the water) and freight rates are down by 25%." The trader added that the average freight rate for Rotterdam to Southeast Asia would now be around $60/mt compared to $80/mt earlier in the year. Logistics sources agreed with this view. One logistics provider said, "between the US Gulf Coast and the Far East, its a case of 'pick a number'."
"Rates have also softened on other deep-sea routes. The Far East to Continental Europe is down by maybe 10%, although owners are still doing their best to hold firm," the source added.
"A Far East main port to Continental Europe would be about $130/mt."
A second source added: "Owners are still trying to keep rates up, but on some routes rates are down as there are not many inquiries at the moment."

Source: Platts