SSY Base Oil Shipping Report

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Business has been slowly cranking up over the past week in most sectors, but there is not the same intensity as there was before the Chinese New Year.

U.S. Gulf

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Fresh enquiry is gradually starting to appear into Asia, but those owners who still have March space are in a hurry to get their ships fully covered, and therefore rates have come down significantly. Ten thousand tons of paraxylene from Houston to China, for example, was reportedly being worked at $62 per metric ton. Other deals have been booked at similar numbers. Methanol is looking to move to China, and a trader is out with 10,000 tons of styrene to cover. Another trader is looking at cumene, glycol and ethylbenzene as a combination, while another wants to ship 3,000 tons of phenol.

Eastbound transatlantic rates have eased slightly due to heavy competition among owners. A 4,500-ton haul of vinyl acetate monomer from Houston to Antwerp was reputedly covered for around $47/t-$48/t. Styrene is unworkable currently, but there are possibilities to ship glycols, cyclohexane, cumene, palm oil, urea ammonia nitrate and methanol occasionally.

Prompt space remains relatively tight in the U.S. Gulf-to-Caribbean market, not that there is a huge amount taking place anyway. Traders have been heard discussing small parcels of base oils, but nothing has been done so far. Caustic and ethanol have also been seen, and there has been a very steady trade in palm oil, soybean oil and molasses.

In shipments from the U.S. Gulf to the east coast of South America, a fresh requirement for 10,000 tons of paraxylene to be shipped to Suape, Brazil, has appeared this week, but otherwise, the diet consists of more ethanol and caustic. Rates are stable.

There is some March space available to India and the Middle East Gulf, but the main carriers do not have any vessels until the first half of April. Base oil demand has tanked, with buyers in this area having access to much cheaper base oil locally, making it hard for U.S. sellers to compete.

Europe

The start of the month brought about an increase in cargo volume in the North Sea and Baltic regions, considerably depleting the amount of prompt open space. Base oils have been fairly active again, while there are just a few signs that the spring run of gasoline is about to start as there have been more requirements for products associated with this sector, such as MTBE, ETBE, ethanol, biodiesel, pyrolysis gasoline, reformate and alkylate.

Ice has become an issue for loading base oils from the Baltic, with Finlands Kotka port requiring ships to be certified ice-class 1A, with some 15-35 centimeters of ice there. Kaliningrad has 5-15 cm of ice and even Latvias Riga and Ventspils ports have seen the development of new ice.

There seems to be a reasonable amount of demand into the Mediterranean. There have been cargoes of caustic, acrylonitrile, methanol, MTBE, vegetable oil, biodiesel, aromatics. Base oils have featured as well, with 6,000 tons from Fawley, United Kingdom, to Vado, Italy, believed to have fixed for around $40/t.

Pyrolysis gasoline has retained its top spot as most active cargo in northbound markets. Six thousand tons were fixed from Spain to Antwerp-Rotterdam-Amsterdam for a level said to be $36/t, and there were other shipments of pyrolysis gasoline from Spain, France, Italy, Portugal and Black Sea. Aromatics were also busy, with cargoes noted from Portugals Algeciras and Leixoes ports; Iskenderun, Turkey; and Sarroch, Italy. A haul of 5,000 tons of C10 from Priolo, Italy, to Antwerp-Rotterdam-Amsterdam ended up going for around 36/t. A 6,000-ton amount of base oils was quoted from Kavkaz, Russia, to Antwerp-Rotterdam-Amsterdam, and another parcel of base oils is believed to have fixed on a journey from Greece to Ghent, Belgium.

There has been a bit more cargo movement within the Mediterranean, but it is still not as active as perhaps it should be. There was something like a dozen biodiesel fixtures, for example, whereas in busy periods there can be as many as 20 fixtures. Base oils at least have been pretty active, with cargoes moving to all the regular destinations. Bad weather has caused some ports to be closed entirely, which in turn has affected the scheduling of vessels.

Westbound transatlantic demand picked up a bit, and with prompt space in scarce supply, it did look as though rates would climb. However, outsiders seized the opportunity to come on berth, but in so doing they pegged rates at unchanged levels. Pyrolysis gasoline has been noted going across, and more paraxylene has been seen. Traders are looking at toluene and mixed xylenes from several places in the Mediterranean and Continental Europe. Sulphuric acid was noted from Hamburg, Germany, and Aviles, Spain, and there were some biodiesel possibilities. The U.K. booked 7,850 tons of chemicals to the U.S. Gulf and U.S. Atlantic Coast at $900,000, reportedly, for a shipment that is loading from three ports for discharge in four others. A haul of 7,500 tons of base oils was booked from Livorno, Italy, to Cuba.

On the Europe-to-Far East route, March space remains tight among the regular carriers. Various parcels of acetone, solvents and aromatics have been circulated, but the actual quantities are not that big and it would be risky for an outsider to go on berth. A 7,500-ton load of base oils was fixed from the U.K. to Singapore at close to $105/t.

Another parcel of base oils was fixed from Antwerp-Rotterdam-Amsterdam to Singapore and Korea, and 10,000 tons of base oils were covered from Kavkaz to Singapore. Another cargo of base oils is looking to ship to Singapore or India from Antwerp-Rotterdam-Amsterdam. There is a stem of base oil in Gdansk, Poland, that some traders may wish to send to Asia or the Middle East/India.

Interest among the traders to send small parcels of solvents and aromatics to India and the Middle East Gulf has waned, and there is still a bit of prompt space around. A parcel of base oils was noted to be looking to go to Aqaba, Jordan.

Asia

There are a few signs that regional business is starting to pick up. Firstly, there are more cargoes quoted throughout the region and secondly, the number of fully open ships has reduced substantially. However, the growth in demand is only moderate and many of the cargoes are for loading in the second half of March or even April, which is of no use to those owners whose ships are open now. Rates for prompt loading are weak in many areas, though owners will be less obliging later in the month. Base oil activity has been relatively subdued.

Benzene is again on a back-burner on the transpacific route, thanks to a number of major Korean benzene plants having scheduled maintenance now. There have been some large slugs of sulphuric acid and renewable diesel to the United States and South America, and base oils are believed to have been sent to South America.

Space remains available for the first half of March, but is much tighter for the second half. March space has become fairly tight to Europe, too. A large cargo of acetic acid is believed to have attracted an outsider onto the route and various parcels of biodiesel are being quoted from China to Europe. A bunch of small chemicals parcels to Turkey have helped fill another vessel, but rates are said to be in the $120/t-$130s/t range and not the usual $150/t-$160s/t.

Few cargo possibilities have been seen in the regional India and Middle East Gulf markets this week. Some benzene and pyrolysis gasoline opportunities remain, and base oil and clean petroleum are still reasonably active, but there is prompt space around and freights are under pressure.

On the eastbound route, MTBE and methanol are among the most active products, and quite a bit of paraxylene has been booked from India, the Middle East Gulf and the Red Sea, which in turn has created opportunities for completion cargoes to piggy-back at competitive numbers. Base oils have been enquiring to ship from the Middle East Gulf to Asia.

Westbound business is generally sparse, although there is not a great deal of space around and some requirements have been fixed at higher levels than they were previously.

Adrian Brown is a senior market analyst for chemicals and base oils with SSY Shipbrokers, London, can be reached atfix@ssychems.comor +44 12 0750 7507. Information about SSY can be found atwww.ssyonline.com. In the Houston office,Steve Rosenthalof SSY’s Chemical Tanker Department can be reached directly at +1 (713) 652-2700 and Jordi Maymi in Singapore can be reached at +65 6854-7127.

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