SSY Base Oil Shipping Report

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Markets all over the world are rather dreary. Asias excuse is the mid-autumn festival in China and other local holidays, but Europe and the United States have no such pretext.

U.S. Gulf

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There are still several ships along the Far East route that have a fair amount of October space, which is maintaining pressure on freight levels. A small volume of styrene is known to have been done, but the bulk of requirements currently revolve around methanol and ethanol, although there was again a possibility to ship 5,000 tons of pyrolysis gasoline from Houston to the Far East.

Parcels of base oil continue to be booked back to Antwerp-Rotterdam-Amsterdam and France from the U.S. Gulf, but aside from the regular Pascagoula shipments, which are massive, the majority of movements are small. Trade on the transatlantic route is still generally busy with a diverse range of products being booked, and includes ethanol, methanol, cumene, ethylbenzene, styrene, glycol, acrylonitrile, lysine, vinyl acetate monomer, used cooking oil, caustic and metaxylene.

The Caribbean route remains largely inactive on the small parcels trade, with perhaps ethanol and small shipments of clean petroleum most prominent. Rates on vegetable oil appear to have slipped since high $20s per metric ton are claimed to have been agreed for 10,000 tons from Norfolk, Virginia, to Rio Haina, Dominican Republic, compared to the last couple that went in the low $30s/t.

Three thousand five hundred tons of base oils were booked from the U.S. Gulf to Brazil in the high $60s/t, and another base oil parcel of 7,000 tons is looking to move U.S. Gulf to Brazil in October along the route into South America. Ethanol otherwise dominates the landscape, with numerous requirements seen this week.

A couple of ships along the India and Middle East Gulf route are able to offer small amounts of prompt space to India. Fixtures include styrene, ethanol and butanol, while the tender for up to 14,000 tons of base oils from Paulsboro, Texas, has several traders eying up the possibility to send the material to India.

Europe

Most owners working along the North Sea and Baltic route somehow managed to claw their way into October without having too much idle time at the end of September after all, but many only have one or two forward voyages booked and are, therefore, desperately competitive on cargoes that match their vessels dates. Base oils have been booked down from Riga, Latvia, and Kaliningrad, Russia, for the beginning of October, and several northbound requirements of base oil have also been noted.

Companies that usually ship a lot of chemicals southbound to Turkey are commenting on how slow demand is, at least for spot volumes, which has left a bunch of ships without much to do and, therefore, having to compete instead on other business into the West Mediterranean for instance. Even the oil majors seem to be having difficulty in selling base oils into Turkey, with one cargo only partly booked for example.

The northbound route is reasonably busy and continues to yield stable freight levels. Two thousand tons of cyclohexanone from Genoa, Italy, to Hemiksem, Belgium, for instance, is understood to have gone in the mid $60s/t, while 7,500 tons of pyrolysis gasoline from Venice to Antwerp-Rotterdam-Amsterdam went at around 38/t, which are largely representative numbers. A couple of base oil cargoes had been quoted from Greece and Spain to Antwerp-Rotterdam-Amsterdam, with perhaps the Greek parcel seeing some traction.

Biodiesel continues to provide a significant amount of employment within the Mediterranean. Base oils too have seen several movements, with spot cargoes going to Mohammedia, Morocco, Berre, France, Naples and Haifa, Israel. Vegetable oil from the Black Sea is providing some return cargoes for ships going into the East Mediterranean, which have suitable last cargoes.

Transatlantic rates have slipped slightly on westbound cargoes. The latest shipment of paraxylene from Rotterdam to the U.S. Atlantic Coast ended up at around $32-33/t, for example. Traders have been looking at toluene, but none are thought to have finalized. Some pyrolysis gasoline was booked, but benzene seems to be on hold. Eight thousand tons of base oils were booked from Augusta, Sicily, to Houston.

The route to Asia has become a lot busier in recent weeks. A substantial amount of styrene has apparently been booked, in addition to the 25,000 tons previously done. Five thousand tons of base oils was fixed from Antwerp to Ningbo, China. A further 3,000 tons to 5,000 tons base oils were quoted from Kaliningrad to Singapore as well as 13,000 tons from Augusta to Singapore. Smaller parcels of acrylonitrile, nonene, acetone and phenol have been seen too.

There have been quite a few cargo requirements quoted into India and the Middle East Gulf, but the amount of vessel space available is excessive and rates are generally flat, with 2,900 tons of base oils from Antwerp-Rotterdam-Amsterdam to Fujairah, U.A.E., and Jebel Ali, U.A.E., seemingly fetched low $90s/t.

Asia

With China taking the week off for the mid-autumn festival, and various national holidays in Korea and Japan, it was always going to be a struggle to unearth much activity this week. On top of that, Typhoon Cong-Ray, number 25 so far this season, has been approaching Taiwan with the likelihood of disruption and delay in its path. In fact, both owners and charterers had already made provision for the holidays and both ships and cargoes had already been covered some time back, and so there has been minimal drama this week. It will be a little while longer before base oil activity picks up again.

With Asian benzene prices too strong to support shipments to the U.S., the transpacific route has been dull. One of the few cargoes fixed this week has been another large slug of around 24,000 tons of base oils from Singapore to Rotterdam and Houston. The market to Europe has been relatively firm, thanks to a series of large shipments of renewable fuels, such as biodiesel, used cooking oil and used cooking oil methyl ester. Seven thousand five hundred tons of easy chemicals from Southeast Asia to Antwerp-Rotterdam-Amsterdam were fixed in the low $70s/t, compared to high $60s/t fixed previously.

Prompt space remains scarce in the regionalmarkets along the India and Middle East Gulf route, whereas demand is quite strong. Base oils have been active out of Yanbu, Saudi Arabia, and Jeddah, with rates steadily increasing on shipments to India and the Middle East Gulf. There have also been a number of base oil requirements from the Middle East Gulf which have been competing against small chemicals and clean petroleum cargoes. Eastbound volumes remain strong, with plenty of interest being shown in methanol, methyl tertiarybutyl ether, benzene, paraxylene, styrene, vinyl acetate monomer, ethanol and the occasional base oil enquiry out of Al Ruwais, U.A.E. Westbound is not particularly eventful, but there are not that many ships on berth with space.

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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