SSY Base Oil Shipping Report

Share

December space has become a lot more scarce in both the United States Gulf and Asia as demand finally ramps up. Europe, however, is still remarkably subdued.

U.S. Gulf

Get alerts when new Sustainability Blog articles are available.

Loading

There is very little remaining space for December along the Far East route, at least for parcels. For example, a requirement to ship 25,000 tons of vegetable oil from New Orleans to Korea had to be divided into two shipments of 8,000 tons and 13,000 tons, the rates for which were mid-$60s per metric ton and mid- to high $50s/t respectively. Some large slugs of methanol have managed to secure December space, but there have also been a number of January cargoes booked already.

The eastbound transatlantic route is regarded as super-hot right now by some owners who are attempting to fix 5,000-ton parcels from the U.S. Gulf to Antwerp-Rotterdam-Amsterdam in the $60s/t and even $70s/t. Such levels may be ambitious but demonstrate the mood among owners. Cargoes of glycol, cumene, caustic, methanol, ethanol, biodiesel and styrene are being circulated at the moment. There are also a couple of base oil possibilities, including 2,000 tons to Antwerp and 4,000 tons to Le Havre, France,.

Cargoes and ships are getting fixed into the Caribbean at a steady lick, but without any great drama, which exemplifies the trade along this route right now. Things like vegetable oil, caustic and ethanol are the primary movers, whereas base oils have been relegated to the backburner.

The route into the east coast of South America is another of those routes that gives the impression of little happening, yet there is a surprising amount of tonnage being committed in this direction each week. Ethanol is being lined up for transport to Brazil and styrene and caustic help fill the gaps. Three thousand five hundred tons of base oils Pascagoula, Texas, to Rio de Janeiro are claimed to have achieved $68/t.

Owners are adopting a firmer stance when it comes to cargoes to India and the Middle East Gulf. Essentially, there are some big shipments of ethanol being sent out of the U.S. Gulf, but there have also been cargoes of styrene and solvents that have attracted levels between $60 and $70/t.

Europe

It remains strangely slow for the time of year along the North Sea and Baltic route. Most owners have perhaps one or two voyages in hand for their vessels, but not much more than that. This hand-to-mouth existence is causing a certain amount of nervousness, and rates are generally soft. Biodiesel has been the stand-out product, creating the most number of spot opportunities. The remaining spot fixtures have been spread around the usual mix of requirements for ethanol, pyrolysis gasoline, caustic, aromatics, urea ammonia nitrate, base oil, vegetable oil methanol and ETBE.

The southbound route has had a better week in terms of market activity, with a more varied list of cargoes moving. Products such as styrene, paraxylene, orthoxylene, benzene, caustic, ethylene dichloride, biodiesel, methyl tertiarybutyl ether and acrylonitrile have been recorded. Rates, though, are broadly unchanged, with 1,000 tons of base oils from Rotterdam to Marmara, Turkey, heard to have fixed in the region of $75,000.

Some of the rates being reported on northbound cargoes have been reasonably strong, such as 6,000 tons of aromatics from Venice and Priolo, Italy, to Antwerp-Rotterdam-Amsterdam, which scooped around 53/t. Five thousand tons of caustic from Lavera, France, to Nantes, France, Dunkirk, France, and Cardiff, Wales, paid about 45/t. Moreover, some parcels, such as 2,600 tons of pyrolysis gasoline from Augusta, Sicily, to Rotterdam have been hard to cover, and it may take an additional parcel of base oils to be added to increase the volume and make it more appealing to owners.

Once again, owners are indebted to the biodiesel market for providing a solid base of cargoes along the inter-Mediterranean route through the week, allowing them to keep their ships moving without much idle time. Most ships have kept one step ahead, but there are still too many ships open before Christmas, which is generally causing rates to remain competitive. Occasionally, the odd deal does get reported at stronger levels, such as 3,000 tons of MTBE from Marseille-Fos, France, to Venice, which collected close to 50/t. Most are like the 4,150 tons of base oils from Livorno to La Goulette, Tunisia, which achieved a more normal $24/t.

Rates have lifted a little on the westbound transatlantic route, mainly because the overhang of tonnage has finally been thinned out. Owners have in mind to charge low $40s/t for 5,000-ton parcels from Rotterdam to the U.S. Gulf, though it remains to be seen how successful they will be. Traders are looking at pyrolysis gasoline and toluene from Antwerp-Rotterdam-Amsterdam and the Mediterranean. Five thousand tons of benzene fixed from Sarroch, Italy, to the U.S. Gulf. Fifteen thousand tons of MTBE was heard to be fixed from Rotterdam to Houston, and 10,000 tons paraxylene fixed from Rotterdam to the U.S. Atlantic Coast, with the next requirement for 8,500 tons already circulated. The stronger clean petroleum market has given support to the urea ammonia nitrate market, with rates hinted to be approaching $30/t for big lots from the Baltic. Twenty thousand tons of FAME fixed from Hamburg to the U.S. Gulf for around $30/t, and 10,000 tons of base oils were heard to have fixed to Lagos, Nigeria, from the new base oils terminal in Riga, Latvia.

A greater number of regular requirements were seen in the market this week, while space along the Far East route has thinned out somewhat. More styrene was seen to Asia, with further acrylonitrile parcels noted. One thousand tons of solvents from Stade, Germany, to Ulsan, South Korea, and Kaohsiung, Taiwan, were heard fixed for $175,000. The usual butanediol and glycol ether parcels were booked, as was the 3,000 tons of rubber process oil from Hamburg to Ningbo, reportedly at $119/t. Between 6,000 tons and 8,000 tons of transformer oil was also booked from Hamburg to Singapore.

Several ships have been left with part-space to fill into India and the Middle East Gulf, leading to some very aggressive rates being done. Seven thousand tons of base oils from Livorno to the Middle East Gulf were heard to have gone at the exceptionally low figure of $50/t, with four to five other owners fighting for the cargo. Three thousand tons of hexane fixed from Constanza, Romania, to the west coast of India, and some acrylonitrile was booked from the Baltic to India. It was good to see traders looking at aromatics from Leixoes, Portugal, again, which could be combined with a small parcel of base oil. Rates talked were heard in the $80s/t.

Asia

It has been another week of strong demand along the domestic route, and it is becoming apparent that space on certain key routes has become very difficult to locate in December, as rates are increasing. The intra-Far East route for example has seen a substantial amount of enquiry, which includes benzene, styrene, toluene, glycol, acetone, phenol, paraxylene, mixed xylenes, pyrolysis gasoline and solvent naphtha C9. Base oils are also prolific, although most cargoes are still relatively small. Southbound too reports heightened demand, to the extent that it has become difficult to secure space before the end of the month. Five thousand tons of mixed xylenes fixed from Yosu, South Korea, to Kerteh, Malaysia, at $38/t, and 7,000 tons of C5 from Daesan, South Korea, to Singapore achieved high $30s/t. Northbound volumes are healthy, pushing up freight levels. The clean petroleum market is especially strong, which is having a domino-effect on the smaller sizes. Only the intra-Southeast Asia region is regarded as being slow.

December space on the transpacific export route has been melting away as vessels fix their remaining space without making much noise. Ten thousand tons of paraxylene fixed from Ulsan to Charleston, South Carolina, for mid- to high $50s/t, with more paraxylene noted. Sulphuric acid is soaking up much of the outsider tonnage, with some owners estimating 20,000-ton cargoes from China to Mejillones, Chile, to be in the $70/t region. Several parcels of acetone, 2-ethylhexanol and butanol have been quoted to Brazil. There is greater demand to Europe, especially on biodiesel and their components, and rates are rising. Traders are looking at parcels of chemicals to Turkey, and attempting to amass 5,000 ton- to 10,000 ton-lots to attract tonnage. Six thousand tons of cyclohexane from Map Ta Phut, Thailand, to Antwerp-Rotterdam-Amsterdam remains unfixed for yet another week. Five thousand tons of base oils from Singapore to Rotterdam are said to have gone in the low- to mid $70s/t, and 16,000 tons of caustic from Anyer, Indonesia, to Portugal was booked in the low $60s/t.

With the sanctions on Iran taking effect, the number of ships available for other regional business along the India and Middle East Gulf route has grown, keeping pressure on freights, despite an apparent increase in demand. Eastbound space is considered tighter, but rates have not changed much. For example, 10,000 tons of methanol fixed from Mesaieed, Qatar, to Southeast Asia in the low $40s/t. There are numerous cargoes of Indian aromatics quoted, some of which fixed at quite competitive levels. Fifteen thousand tons of paraxylene from Yanbu, Saudi Arabia, to China was worked, with charterers ideas in the low $50s/t. Base oils continue to move to China from Al Ruwais, U.A.E., with rates occasionally as competitive as $45-46/t, although some fixtures were seemingly done for $54 and $55/t. Westbound seems stable. Parcels of paraxylene, benzene, ethanol, methanol and glycol have been seen.

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.

Related Topics

Logistics & Distribution    Shipping