SSY Base Oil Shipping Report

There has been a bit more movement in all regions this week. Rates are however generally flat owing to the large amount of vessel space that still must be covered through the first half of September.

Americas

The market to the Caribbean is pretty much unchanged this week. Methanol has been fixed into the United States from Trinidad and Tobago, and there have been some smaller clean petroleum cargoes as well as tallow and vegetable oil. A small parcel of caustic was looking for cover from the U.S. Gulf to Haiti

A couple of base oil requirements have been quoted this week into Brazil, one of which is trying to combine with some chemicals, and the other has been beefed up with some clean petroleum to try and reduce the freight element. Twenty thousand to 24,000 tons of ethylene dichloride and caustic is being quoted from the U.S. Gulf to Maceio, Brazil, and Santos, Brazil. Bids were due on a tender for the delivery of 6,500 to 8,500 tons of ethanol every 40 days to Peru for the balance of the year, with only a select few owners expected to be real candidates to service this lane, with rate levels expected to be in the high $60s to low $70s per metric ton if sourced ex U.S. Gulf.

It was a busy week along the transatlantic route, with several traders quoting styrene and benzene to Europe. Space is limited on a prompt basis however, giving an upwards boost to freight levels. Glycols, ethanol and methanol are also being shipped. Caustic has been discussed into the Mediterranean, and a large lot of caustic was booked into Durban, South Africa.

There is still some September space available to Asia on a selection of vessels. Traders are exploring the possibility of sending styrene, methanol, ethylene dichloride, glycols and ethanol to Asia, and there has been some vegetable oil noted too. Rates appear to be drifting sideways.

Cargovolumes to India and the Middle East Gufl are well matched to the supply of tonnage. Traders booked 17,500 tons of ethylene dichloride, styrene and hexane from the U.S. Gulf to India, with the rate expected to have been in the mid $60s/t. A 10,000 to 16,000 tons cargo of base oils has been quoted Paulsboro, New Jersey, to the west coast of India for September loading.

Europe

In terms of cargo enquiry, it has been a better week along the North Sea and Baltic route following the return to work after the holidays last week. Rates remain rather fragile, though. There are not a great number of prompt ships around, but there are enough to dampen rates. Clean petroleum has actually been fairly active, and there have been quite a few ethanol possibilities too. Several base oil cargoes were noted out of the Baltic, and 17,000 tons of base oils were seen from Rotterdam, Netherlands, to Hamburg, Germany. Five thousand tons of benzene was fixed from Liepaja, Latvia.

As expected, there has been an improvement in demand southbound over last week, but more volume is needed if all the prompt space is to be filled. Some larger shipments were noted, such as 17,000 tons of ethanol to Fos, France, and 14,000 tons of base oils from Rotterdam, Netherlands, to Valencia, Spain, the rate for which is believed to be around $16/t. Ten thousand tons of biodiesel was booked into Constanza, Romania. Six thousand tons of caustic was quoted from Antwerp-Rotterdam-Amsterdam to Yumurtalik, Turkey, and there is some caustic to Aveiro, Portugal, and some caustic potash to Spain.

Five thousand tons acetic acid fixed from Saltend, United Kingdom, to Turkey, and some aviation gasoline was taken out of the Baltic. Parcels of AdBlue and Nutriox, which prevents hydrogen sulphide and the odour it produces, were seen to Spain and France. Eight hundred tons of base oils fixed from Rotterdam, Netherlands, to Gebze, Turkey. A parcel of acetic was done from Saltend, U.K., to Sines, Portugal, and another vessel took 3,000 tons of paraxylene from Gonfreville, France, to Sines. Five thousand tons of biodiesel fixed from Aarhus, Denmark, to Huelva, Spain.

The resumption of trade northbound following the holidays has been timely. A few vessels would welcome more by way of prompt cargoes, but overall, it is slowly getting back on track. Cargoes of FAME were booked from Huelva, Spain; Cadiz, Spain; El Ferrol, Spain; and Sete, France. The next lifting of 6,000 tons of pyrolysis gasoline from Berre, France, to Moerdijk, Netherlands, has been quoted. Five thousand tons of pyrolysis gasoline also seems to have fixed from Barcelona, Spain.

Six thousand tons of caustic fixed from Lavera, France, to Uddevalla, Sweden, but 7,000 tons of caustic into the Baltic from Odessa, Ukraine, has yet to be done. Shipments of isomerate and reformate were noted. Five thousand tons of benzene fixed from Sarroch, Italy, to Gonfreville, France. Three thousand nine hundred tons of base oil fixed from Leixoes, Portugal, to Antwerp, Belgium, while 10,300 tons of base oils are quoted from Kavkaz, Russia, to Greece and Rotterdam, Netherlands.

Prompt space is relatively scarce again around the Mediterranean, with most ships clustered around the end of August or the first week in September. Biodiesel is a useful provider of business, with ships often performing two to three voyages with the same cargo left on board for the entire time. Caustic has been active, with cargoes moving from France to Turkey and Spain, and from Odessa, Ukraine, to Ravenna, Italy, and also to Haifa, Israel. Five thousand tons of benzene fixed from Aliaga, Turkey, to Venice, Italy, with another load booked 2-Black Sea to Venice. Ten thousand tons of base oils were booked from Kavkaz, Russia, to Turkey and the East Mediterranean.

Trade feels a bit desultory across the Atlantic, yet the number of spot fixtures is perhaps in line with usual volumes. The problem is that there are more ships on berth than usual, so everyone gets a smaller slice of the pie. Methanol appears to have been fixed from the Baltic and Antwerp-Rotterdam-Amsterdam, with a fresh possibility of 17,000 tons of methanol quoted. Cargoes of magnesium chloride and renewable jet were booked. Eleven thousand tons of hydrocracker bottoms were quoted from Antwerp-Rotterdam-Amsterdam to Lakes, and a cargo of urea ammonia nitrate was put on subs from the Baltic to Lakes.

Eight thousand tons of base oils fixed from Rotterdam, Netherlands, to Houston for around $30/t, the cargo being a replacement delivery for a cargo that was supposed to have been shipped from Korea to the U.S. Gulf. A cargo of sulphuric acid may have been booked from the Baltic to the U.S. Gulf, but another charterer has deferred its acid cargo to October. Four thousand tons of caustic potash was worked from Antwerp-Rotterdam-Amsterdam to the U.S. Atlantic Coast, while others were trying 3,000 to 4,000 tons of caustic potash to Houston. Eight thousand tons of caustic fixed from Antwerp-Rotterdam-Amsterdam to the U.S. Atlantic Coast for around $30/t.

The Far East route is very quiet. Ethylene dichloride has been checked, but not firmed, and the same for attempts to ship 2-ethylhexanol from Antwerp-Rotterdam-Amsterdam. Some acrylonitrile was noted and there have been more small parcels of vegetable oil to China and Malaysia. Seven thousand five hundred tons of urea ammonia nitrate was quoted from Sillamae, Estonnia, to Australia for October.

An uneventful week along the India and Middle East Gulf route, where 9,000 tons base oils fixed from Cartagena, Spain, to Mumbai and more base oils were quoted from Gdansk, Poland, to Mumbai and Rotterdam, Netherlands, to Hamriyah, U.A.E. Some ethylene dichloride was pushed to Pakistan, but otherwise it has been mostly small parcels of chemicals

Asia

It is turning into a busy typhoon season in Northeast Asia, with the eleventh typhoon, Bailu, which showed up over the weekend. The disruptive effects can be seen rippling through the entire region, with ships running late and charterers faced with the decision whether to cancel or not. Moreover, there have been quite a few cargoes requiring August loading, including parcels of benzene, light cycle oil, mixed xylenes and paraxylene. Four thousand seven hundred and fifty tons of base oils were quoted from Onsan, South Korea, to Taichung, Taiwan, and Zhenjiang, China, with a couple more to Tianjin, China, from both Onsan and Yosu, South Korea. For September, there has been enquiries of benzene, phenol, acetone, MIBK, toluene, mixed xylenes and paraxylene.

It remains fairly quiet southbound. Some sulphuric acid was noted to Vietnam, and a large cargo of caustic was booked into Southeast Asia. Six thousand tons of methanol concluded from Dalian, China, to Merak, Indonesia. More methyl tertiarybutyl ether has been seen, and 2,000 tons of base oils were quoted from Yosu, South Korea, to Gresik, Indonesia. Clean petroleum saw some fixing into the Philippines from Korea.

Aromatics continue to get fixed northbound. Ten thousand tons of paraxylene was covered from Map Ta Phut, Thailand, to Yanbu, Saudi Arabia, and pyrolysis gasoline was covered from Batangas, Philippines. Four thousand tons of glycerine was noted from Lubuk Gaung, Indonesia, to Tianjin, China, and 10,000 tons of PME loaded from Pelintung, Indonesia, to Nansha, China. Six thousand tons of unconverted oil from Bangkok to Ulsan, South Korea, remains uncovered off Sept. 11-15, though the early September lifting looks to have gone.

Apart from the usual pyrolysis gasoline and heavy aromatics parcels there does not seem to have been a great deal of action between Southeast Asia this week.

Benzene is still under discussion for September on the transpacific route, while several traders are checking the possibility of doing paraxylene. There is some very prompt space remaining, but not a great deal of space beyond that. The parcels trade to Europe has induced several ships on berth but finding completion cargoes on the right dates can be tricky and can explain why some freights are more competitive than others.

Three thousand tons of base oils were seen from Korea to the East Mediterranean, and 2,500 tons of chemicals were quoted from Jiangyin, China, to Yumurtalik, Turkey. At the other end of the scale, 20,000 to 32,000 tons of caustic was noted from China to Durban, South Africa. Parcels of used cooking oil continue to get fixed, but rates have drifted lower.

There is a steady volume of business in the regional markets. The issue of EWRI has reduced the number of casual callers to the region which in turn has caused rates to stabilize. Exports to India have been sustained through shipments of regular products such as methanol, linear alkyl benzene, ethylene dichloride, styrene, glycols and some paraxylene as well. Return volumes have been primarily aromatics such as pyrolysis gasoline and benzene.

Eastbound volumes have been maintained with regular cargoes of methyl tertiarybutyl ether, methanol, paraxylene, benzene and pyrolysis gasoline. Indian volumes of aromatics have been especially strong. Westbound has produced a lot of interest in paraxylene and benzene, both to Europe and the Americas. Completion space can be found, which explains why 14,000 tons of benzene from Sikka, India, to the U.S. Gulf achieved high $50s/t. Twenty thousand tons of paraxylene from Al Jubail, Saudi Arabia, to the U.S. Atlantic Coast is looking to settle at similar levels. Twelve thousand tons of canola from Jebel Ali, United Arab Emirates, to Brindisi, Italy, is understood to have gone in the $50s/t.

Adrian Brown, 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.