SSY Base Oil Shipping Report

It has been slow for much of the week in the Americas, especially for base oils. Europe has had an occasional burst of base oil movement, mainly within the Mediterranean, and Asia has been generally dull, with mainly small base oil cargoes and a few movements to India and the Middle East Gulf.

U.S. Gulf

Ships are slowly getting covered on the U.S. Gulf to Far East route. Eight thousand tons of mixed xylenes appears to have fixed from the U.S. Gulf to the Far East. Other traders were looking at 5,000 tons of mixed xylenes too, while 10,000 tons of paraxylene was seen from Houston to China, and 7,000 tons of used cooking oil shipped from Houston to Singapore seems to be still around. Two to three thousand tons of phenol was spotted from Houston to China. Fifteen thousand tons of vegetable oil shipped from New Orleans to Pyongtaek, South Korea, was relet. Between 10,000 and 12,000 cubic meters of ethanol was quoted Paita, Peru, to China.

As expected, the styrene market has been busy into Europe due to the plant outage in Holland. Cargoes of cumene, vinyl acetate monomer, glycol, acrylonitrile, metaxylene, urea ammonia nitrate, tall oil, vegetable oil and paraxylene have either been fixed, or are looking for space on the eastbound transatlantic route. Generally, freights have been stable, although there has been a requirements for 5,000 tons of ethanol from New Orleans to Sweden, which has reportedly gathered interest from a couple of vessels at levels below the last-done rate of $82 per metric ton.

The small parcels market along route into the Caribbean has been uneventful. Most requirements have been large, such as 22,000 tons of caustic to Matanzas, Cuba, and a further 20,000 tons to Rocky Point, Puerto Rico. Quite a lot of vegetable oil and molasses has been booked this week, but again, larger lots. The tender for 1,500 tons of base oils for delivery to Cartagena, Colombia, appears to have been awarded and will probably be supplied from the U.S. Gulf.

It has not been a very lively week on the east coast of South America route. A couple of caustic parcels were worked into Brazil and Argentina. Styrene seems a possibility to Brazil and several cargoes of urea ammonia nitrate was booked into Brazil and Argentina.

Traders in the U.S. Gulf are again talking of ethanol to India and the Middle East Gulf. Some styrene and methanol were apparently fixed to India, but rates look weaker.

Europe

It has been slightly busier in the North Sea and Baltic in comparison to the previous week, which has absorbed some of the prompt tonnage, propelling it instead towards the last week of August. The renewables segment has been the most active, which includes FAME, used cooking oil methyl ester, used cooking oil, palm fatty acid distillate and ethanol. The extra demand has also allowed some of the idle deep-sea vessels to pick out delaying voyages, such as 12,500 tons of pyrolysis gasoline from Terneuzen, Netherlands, to Rostock, Germany, which reportedly paid between $180,000 to $190,000, and 11,500 tons of pyrolysis gasoline, solvent, naphtha C9 and solvents from Sillamae, Estonia to Antwerp-Rotterdam-Amsterdam. Base oils have been rather slow however.

The Turkish lira strengthened during the week, quelling some of the fears of an economic meltdown. However, nothing much will be moving southbound in or out of Turkey because of the week-long Bayram holiday. Cargoes of FAME have been in evidence this week, and there were parcels of caustic, linear alkyl benzene, alpha olefins and ethanol noted. The base oils that have been quoted into the Mediterranean have been routine deliveries. Twenty thousand tons of methyl tertiarybutyl ether concluded from Rotterdam, Netherlands to Turkey, and 5,000 tons of paraxylene fixed from Gonfreville, France to Sines, Portugal.

The flow of cargo northbound looks to be a little slower this week, but there was also a widespread public holiday mid-week that would certainly have interrupted trading. Two thousand, five hundred tons of toluene from Porto Margher, Italy, to Antwerp-Rotterdam-Amsterdam was covered, with levels reported to be strong on this occasion, possibly due to timing. Several traders have been competing to secure a 6,000 tons pyrolysis gasoline cargo from Berre, France. Separately, 3,000 tons of benzene was fixed from Lavera, France to Gonfreville or Antwerp-Rotterdam-Amsterdam, and 4,000 tons of wax was booked from Greece to Hamburg, Germany. Five thousand tons of base oils were covered from Cartagena to La Pallice, France.

In the Mediterranean, owners can be grateful that the biodiesel business has reactivated, with numerous short trips fixed, along with a couple of longer ones into the Black Sea. Caustic has again provided some fixtures, with several shipments recorded out of Port Said, Egypt, and several more from Lavera. Four thousand tons of styrene managed to be fixed from Tarragona, Spain to Turkey outside of the usual contract. Six thousand tons of benzene is looking to go from the west coast of Italy to Huelva, Spain, at the end of the month. Six thousand, five hundred tons of methanol was covered from Arzew, Algeria, to Yumurtalik, Turkey.

It has been a busier week on the transatlantic westbound market. However, the extra material has simply encouraged more ships on berth, which has meant that rates remain soft. Benzene has been the main event, with something like 30,000 to 40,000 tons fixed, with some additional pyrolysis gasoline booked. Six thousand to eight thousand tons of benzene was noted from Immingham, England, to the U.S. Gulf for prompt loading. Nine thousand tons of paraxylene lifted subjects from Rotterdam to the U.S. Atlantic Coast for around $29/t. Three thousand tons of methylene diphenyl isocranate concluded from Antwerp, Belgium to Houston, while 10,000 tons of AdBlue is understood to have fixed from Sluiskil, Netherlands, to the U.S. Atlantic Coast and U.S. Gulf. There appears to be some urea ammonia nitrate fixed across from Heroya, Norway, too. Sixty thousand tons of urea ammonia nitrate was quoted from Sillamae to the U.S. for September. One thousand tons of aniline was noted from Antwerp-Rotterdam-Amsterdam to Houston.

Along the Far East route, traders have started to nose around about styrene again, but nothing firm so far, and paraxylene is also understood to be workable to Asia, but again, no fixtures have been heard. Traders are also exploring the possibility of sending acrylonitrile to Asia, whether from the Baltic or Turkey, but the material could also end up in India.

On the route into India and the Middle East Gulf, there is a new tender for 10,000 tons of mixed xylenes to Sikka, India for October arrival, which has seen a few traders look at sourcing it from Europe. Three thousand, six hundred tons of base oils were quoted from Port Jerome, France, to Fujairah, United Arab Emirates, and were receiving a lot of attention from owners.

Asia

Extreme weather conditions have again disrupted traffic in domestic Asia, with ports in China and Korea closed for several days at a time. Typhoons number 19 and 20 are closing in on Japan and Korea, and will cause yet more disruption and delay. On top of all this, the Chinese devaluation of the yuan has caused customers to ease up on imports. There are some prompt requirements around, such as 4,000 tons of methanol from China to Balikpapan, Indonesia, and 9,000 tons of styrene from Daesan, South Korea, to Hong Kong, which suggest ships falling out of laycans due to the bad weather. Several small base oil cargoes were noted from Korea to Southeast Asia for September. Base oils are being circulated from Thailand back up to China, and the usual 10,000 tons lots of paraxylene are there from Thailand to China.

It remains slow on the transpacific export route, with benzene again moving from Europe to the U.S. rather than from Asia. Moreover, benzene demand within Asia is increasing as downstream units that were in turnaround restart production again, keeping domestic prices firm and little opportunity for shipments to the U.S. An interesting possibility was for 10,000 to 12,000 tons of vegetable oil from Dalian, China, to Chile. The market to Europe is not as busy as it was, but it has produced enough volume to put six to seven ships on berth from the end of August to late September, but not all these ships are full. Six thousand tons of cyclohexane is noted again from Map Ta Phut, Thailand, to Antwerp-Rotterdam-Amsterdam for the end of Sept. Four thousand tons of aniline was fixed from Dalian to Tarragona. Four thousand tons of acid oil was done from the Straits to Antwerp-Rotterdam-Amsterdam in the mid $80s/t, while 6,000 tons of used cooking oil from the Straits to the east coast of the U.K. went for around $90/t. Further used cooking oil methyl ester, palm methyl ester and used cooking oil cargoes have been noted.

Business has been mostly quiet in the India and Middle East Gulf markets, and with the holidays in the region, combined with flooding in parts of India, it is not likely to improve greatly. All the same, some cargoes are proving hard to fix, with 10,000 to 12,000 tons of gasoil from Fujairah to Male, Maldives, bidding owners at $365,000. Base oil has been busy from the Red Sea into India and the Middle East Gulf, and there have been cargoes from Iran, Al Ruwais, U.A.E., and Sitra, Bahrain. Eastbound has seen competitive numbers on paraxylene from India, with 10,000 tons fixed to the Far East at $32/t, a further 15,000 tons fixed to China at $34/t and another 15,000 tons booked to Taiwan at $34/t. Ten thousand tons of methanol from Oman to Southeast Asia was heard to be on subs in the mid $30s/t. Westbound saw 15,000 tons of MTBE fix from Mesaieed, Qatar, to Fos, France, reportedly in the $50s/t. Forward fixing seems to have been quiet however.

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.