SSY Base Oil Shipping Report


The United States market is on stand-by mode during the American Fuel and Petrochemical Manufacturers International Petrochemical Conference in San Antonio, Texas. In Europe, there have been many more freight inquiries, and Asia too saw a small upwards shift in demand.

U.S. Gulf

Somewhat positive vibes have been emanating from the AFPM event with regards to the trade talks between the U.S. and China, but at this stage there are no hard facts to back it up. The amount of spot fixing has dropped off meantime on routes into the Far East, although some of the methanol, caustic and styrene inquiries from earlier are still on-going. However, the closure of the Houston Ship Channel due to the fire at a storage terminal and the subsequent risk of further explosions through vapour release has halted trade for the time being. Moreover, high water levels in the Mississippi have caused the closure of a number of plants and this too may have an influence on how much demand for vessel space there will be.

Away from Houston and New Orleans, trade has been strong on the eastbound transatlantic route, with exports of biofuels from the U.S. Atlantic Coast, for example, tall oil and renewables from Mobile, aromatics from Corpus Christi and Port Arthur, ethylene dichloride from Lake Charles and methanol from the Caribbean. However, most scheduled carriers cannot avoid the two main affected areas, and it still must be seen how much trade actually develops, and how much has been lost. Not all of the berths along the Mississippi have been affected, for example, with some cargoes still reported to be moving.

As with the other routes out of the U.S. Gulf, new business has been very intermittent into the Caribbean. Many of the new requirements seem to be focused on edible oils, whether within the Caribbean, or in some cases from Norfolk, for which space does not seem that tight. The tricky issue last week of finding a vessel to tranship a cargo of palm oil off a vessel unable to enter the Mississippi proved successful in the end.

There has not been a great deal of space on the routes from the U.S. Gulf into Brazil and Argentina, thus freight levels remain fairly strong. Rates in the range of $60 to $80 per metric ton have been noted for 5,000 tons requirements from the U.S. Gulf to northern Brazil, for example. Base oils are noted as moving, along with some paraxylene into Brazil, and there have been more ethanol fixtures too. Bright stock inquiries continue to be seen from Brazil into the Middle East Gulf or India.

Traders are still interested in shipping base oils from the U.S. Gulf to India, although the number of individual inquiries is down. Styrene and ethanol are attracting owners attention, as well as ethylene dichloride possibilities.


With another week of sustained activity in the North Sea and Baltic region, rates have started to edge upwards as owners skirt around those cargoes that historically provide lower returns, and instead focus on the more specialized items, or those where ports to dates are restricted. Some owners have already managed to cover all their vessels through the first half of April, and there are a few ships showing space only towards the end of April. The range of commodities quoted has been extensive and not confined to just a few categories. Base oils are part of the mix, with a couple of shipments out of the Baltic for example, and attempts to send a few more cargoes into the United Kingdom from Continental Europe prior to Brexit.

Rates for small parcels southbound into the Mediterranean, typically under 3,000 tons in size, are experiencing firm freight levels, but there have been some larger cargoes of caustic and biodiesel for example that have gone for more competitive numbers. Parcels of styrene, wax, ethanol, benzene, styrene and ethylene dichloride have been booked this week. In addition, 3,450 tons of base oils from Rotterdam to Derince seemed to have been lingering in the market, trying to find end March space. The use of Valencia as a staging post for base oils is becoming more apparent, with a requirement to ship 11,500 tons to Valencia from Fawley, U.K., and Rotterdam noted, while reloading a further 2,000 tons to Egypt.

Moderate cargo volumes have been seen on the northbound route, including 4,500 tons of base oils from Augusta, Sicily, to Rotterdam, which will be out of storage tanks because the refinery has yet to restart. Five thousand tons of benzene was noted from Sarroch, Italy, to Antwerp-Rotterdam-Amsterdam, and 6,600 tons of pyrolysis gasoline concluded from Berre to Moerdijk.

Owners have been scrambling to cover the last of their March vessels on the intra-Mediterranean route, but they have not been entirely successful. At times, there seemed to be a lot happening during the week, but then quieter spells would occur. Of course, many voyages are only of two to three days duration, which means a lot of fixing is needed. Six thousand, five hundred tons of base oils have been booked from Spain to Turkey, but otherwise not many spot base oil fixtures occurred this week.

Some westbound requirements have faded through the week along the transatlantic route, such as pyrolysis gasoline and methanol, and instead there have been more inquiries to ship toluene and mixed xylenes. Biodiesel has also been active, with a couple of new inquiries seen, although the 8,000 tons shipment from Bilbao to U.S. Atlantic Coast failed at $39/t. More caustic has been covered, and some more paraxylene was attempted, although it did not fix cleanly. Three thousand tons of octene from Tarragona to Houston reportedly fixed at $100/t. More sulphuric acid fixed from Aviles and Hamburg, and whilst there is still a heavy concentration of ice in the St. Lawrence currently, a growing number of cargoes have been seen and booked into Canada.

Fewer requirements remain outstanding this week on routes into the Far East as trade has slowed. Styrene is no longer visible, and indeed, some of the cargoes already booked may end up in places such as Egypt or India instead of Asia, thanks to changes in price. Base oils continue to be seen, with attempts made to ship them from the Baltic and the Mediterranean to Singapore.

Overall, not much has changed this week on the India and Middle East Gulf route. Several ships have space for small parcels, while a couple more are interested to go on berth and will probably end up taking the cargoes that are out there, such as phosphoric acid from Tunisia, or vegetable oil from the Black Sea. There are also some base oils being discussed to India, Jordan and the United Arab Emirates.


Prompt space is pretty tight throughout the region on the domestic route and extends well into the first week of April. A few vessels are already covered for the entire month of April, but the majority fall into the period of April 10-20. Paraxylene has been a little better, with shipments noted from Thailand, Taiwan and Korea, and even benzene saw a dozen imports or so into mid-China. However, petrochemical inventories are reportedly very full in China, and it is probable that trade will start to slow again. Only a few small base oil requirements have been seen into China too.

There is almost no space left on the transpacific export route for April. Benzene has been seen, and there is seemingly an arbitrage for mixed xylenes to the U.S. too. Five thousand tons of pyrolysis gasoline was heard going from Ulsan to Houston. Freight levels are still in the mid $50s/t, although some owners are asking well into the $60s/t. There is not much space remaining to Europe in April either. Biofuels have been grabbing the headlines, with freights for 4,000-ton cargoes from China to northwestern Europe in the mid- to high $90s/t area. Six thousand tons of benzene, toulene and xylene from Map Ta Phut, Thailand, to Antwerp-Rotterdam-Amsterdam is reported to have collected low $70s/t. Five thousand tons of base oils were quoted from Singapore to Rotterdam as part of an intra-company transfer.

It has been busy again in the regional markets along the India and Middle East Gulf route. Base oils are seeing activity from the Red Sea, with one cargo of 10,000 tons ending up in Chennai. Further inquiries have been noted from Al Ruwais, U.A.E., and Sitra to India again for April. There is not a great deal of space eastbound, and 10,000-ton cargoes have been awkward to cover. Plenty of methanol, glycols, aromatics and methyl tertiary butyl ether have been driving these rates, which can see numbers up to $55/t for 10,000-ton quantities. Westbound is also busy, and there is not much uncommitted space around. A number of base oil cargos are being quoted to Antwerp-Rotterdam-Amsterdam as well as into the East Mediterranean from the Red Sea and Ruwais.

This report was originally featured in the March 27 edition of Lube Report Americas.

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 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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