SSY Base Oil Shipping Report

Activity is more encouraging out of the U.S. Gulf, but both Asia and Europe are disappointingly quiet.

U.S. Gulf

Several cargoes to the Caribbean seem to be dragging their heels when it comes to fixing. One thousand eight hundred tons of base oils from the U.S. Gulf to Cartagena, Colombia, are still being quoted for end of June, early July loading, while 12,000 cubic meters of ethanol from the U.S. Gulf to Cartagena is still uncovered for prompt loading.

Ethanol has still to see any substantial activity into Brazil. Instead, it seems to be busy with chlor-alkali products. Eleven thousand tons of eight grades base oils are believed to have been fixed from the U.S. Gulf to Rio de Janeiro. A large slug of styrene is seemingly looking for cover to Manaus, Brazil, and 10,000 tons of paraxylene from the U.S. Gulf to Suape, Brazil, was also seen for July. The second shipment of 10,000 cbm to 13,000 cbm of ethanol out of a three-cargo contract from the U.S. Gulf to Peru is tentatively being studied for July.

It is still very active on the eastbound market. Methanol in particular is flooding across to the United Kingdom, northwestern Europe and Mediterranean in large volumes, filling some of the bigger vessels from the U.S. Gulf. Ethanol is also having a busy time with several small parcels booked, but others, such as 12,000 cbm from the U.S. Gulf to Antwerp-Rotterdam-Amsterdam have still to be covered. Eight thousand tons to 10,000 tons of ethanol from the U.S. Gulf to Finland is thought to be temporising. Five thousand tons to 7,000 tons of cumene is said to be looking for space from Houston to Antwerp. Fifteen thousand tons to 20,000 tons of caustic continues to be quoted from the U.S. Gulf to northwestern Europe and Finland for end June but has an unrealistic freight target of $40 per metric ton. Ten thousand tons of ethylene dichloride was seen from the U.S. Gulf to Tarragona, Spain, and there is 8,500 tons to 9,500 tons of styrene and glycol from Geismar, Louisiana, and Braithwaite, England, to Yumurtalik, Turkey, to be fixed.

Styrene is heavily quoted by traders to Korea and Taiwan, with the last remaining June vessel reported to be inundated with requests for the balance space. Rates could strengthen as a result. Methanol is another commodity that has seen some very large shipments fixed from the U.S. Gulf and Caribbean to Asia, with further similar enquiries still being circulated for June shipment. Thirty-one thousand five hundred tons of tallow and yellow grease from Houston and New Orleans, Louisiana, to Singapore is understood to have fixed at around $60/t.

Another quiet week along the India and Middle East Gulf route, with just some small parcels of propanol and propyl acetate quoted from Houston to Kandla, India, as well as some small lots of solvents and acrylonitrile to India for traders.

Europe

It was a subdued week across Continental Europe and the Baltic, with prompt positions starting to show up again. Owners confirm that contractual volumes have been reasonable, but there have still been gaps between nominations that they have been unable to fill with spot volumes. FAME and ethanol are certainly among the more active of the commodity types, but the usual Baltic pyrolysis gasoline and base oils have been less frequent.

The amount of cargo hitting the southbound market is roughly similar to previous weeks, and therefore there are not that many open ships that are caught in critical positions without anything to do. Five thousand tons of caustic fixed from Antwerp, Belgium, to Barcelona, Spain, and another ship took 5,000 tons of ethylene dichloride from Antwerp to Barcelona, while 1,200 tons of olefins concluded Antwerp to Berre, France. Three thousand tons of styrene is looking for a ship from Rotterdam to Berre and 6,000 tons of pyrolysis gasoline was quoted from Dunkirk, France, to Italy. Up to 2,000 tons of base oil was circulated from Le Havre, France, to the East Mediterranean for prompt loading.

Overall demand remains adequate on the northbound route. This week saw the return of aromatics, with 5,500 tons of pyrolysis gasoline fixed from Berre to Moerdijk, the Netherlands, and 10,000 tons of pyrolysis gasoline quoted from the Black Sea to Antwerp-Rotterdam-Amsterdam. Three thousand tons of benzene was seen from Lavera, France, to Aveiro, Portugal, while 3,000 tons of toluene was booked from Algeciras, Spain, to Antwerp, Belgium. Four thousand tons of caustic from Lavera to Santander, Spain, was covered. Three thousand two hundred tons of base oils were fixed from Cartagena to La Rochelle, France, and 4,000 tons of toluene was quoted from Priolo, Italy, to Antwerp-Rotterdam-Amsterdam.

It had been expected that the Mediterranean market would see more activity following the end of the Muslim holidays, but in fact it was rather slow this week, and the amount of prompt space actually increased. Biodiesel volumes were slighter lower, though an unusual quotation was for 2,000 tons of biodiesel from Turkey to the Spanish Mediterranean for end of June. Base oils were however a little busier, with 4,500 tons quoted from Cartagena to Haifa, Israel; 4,900 tons from Livorno, Italy, to Turkey and Varna, Bulgaria; and a further 2,500 tons were spotted from Spain to Oran, Algeria.

Demand has picked up westbound, with multiple enquiries of benzene being seen from Antwerp-Rotterdam-Amsterdam to the U.S. Gulf in 5,000 tons to 10,000 tons sizes, as well as an existing quotation for 5,000 tons of benzene from Sarroch, Italy, to the U.S. Gulf. Rates are perhaps a little firmer, with levels pushing over $30/t now for 10,000-ton parcels, up for high $20s/t last week. Fifteen thousand tons to 18,000 tons of sulphuric acid from Ronnskar, Sweden, to the U.S. Gulf was confirmed to have achieved a level in the $30s/t, while 20,000 tons of sulphuric acid from Hamburg, Germany, to the U.S. is claimed to have gone in the low $30s/t. Fifteen tons of pyrolysis gasoline seems to have been booked from the Baltic to the U.S. Gulf.

It has been another slow week to the far East, and several vessels are still searching for completion cargoes. No further styrene shipments have occurred, although 5,000 tons of paraxylene did manage to fix from Gonfreville, France, to China. Three thousand tons of octene concluded from Tarragona to Map Ta Phut, Thailand. With U.S. methanol flooding into northwestern Europe and the Mediterranean, traders are again looking to offload methanol from the Black Sea into China, although India too could be a possible home for the product.

Business remains patchy towards India, with some cargoes, such as styrene and methanol, having the option to discharge in Asia. Four thousand tons of hexane concluded from Constanza, Romania, to the west coast of India and Karachi, Pakistan, with a small volume of oxo-alcohols quoted to the same destination from Antwerp-Rotterdam-Amsterdam.

Asia

There has been a little more business seeping back into the Northeast Asia market after the holidays. Ten thousand tons of paraxylene was noted from Yosu, South Korea, to Ningbo, China, and 2,000 tons of toluene was quoted from Ulsan, South Korea, to Taichung, Taiwan for end of June. A number of small base oil possibilities were seen from Korea into China and Taiwan. Eleven thousand tons to 12,000 tons of light cycle oil was noted from Korea to mid-China, with a further 20,000 tons quoted for slightly later dates, possibly because demand for the larger sizes of vessel has increased enormously, boosting freights and charterers may be looking to explore the possibility of shipping smaller volumes instead.

It remains rather slow along the soutbound route in general. Three thousand tons of orthoxylene was noted from Yangpu, China, to Pasir Gudang, Malaysia, for transhipment to Europe. Two thousand tons of base oils were seen from Yosu to Singapore and 3,000 tons of soybean oil was pushed around Beihai, China, to Hong Kong.

Space can still be found along the northbound route for end of June loading. Ten thousand tons of paraxylene from Kerteh, Malaysia, to mid-China is believed to have gone in the mid $20s/t. Three thousand tons of benzene from Pasir Gudang to Taiwan is suggested to have fixed in the $30s/t while 3,600 tons of fatty alcohol from Batam, Indonesia, to mid-China seems to have achieved high $30s/t. A similar level is claimed to apply on a booking of 3,000 tons of benzene from Map Ta Phut to mid-China. Ten thousand tons to 12,000 tons of biodiesel was quoted from Straits to mid-China.

Owners still need to clear away their remaining June positions along the southeast Asia route. Ten thousand tons of biodiesel was quoted from Straits to south China for prompt loading and 3,000 tons of styrene was noted from Merak, Indonesia, to Map Ta Phut. Three thousand tons of styrene from Merak to south China was booked. Two thousand tons of 2-ethylhexanol from Gresik, Indonesia, to Dongguan, China, is reckoned to have fetched mid $30s/t. Eight thousand tons of pyrolysis gasoline was noted from Batangas, Philippines, to Singapore.

Benzene is active on the Transpacific route, with the last bits of June space having gone and most of the July space on hold too. Sulphuric acid continues to see activity towards Chile from Korea and Isabel in 30,000 tons sizes for August, but with charterers rate ideas of below $60/t, owners are less than excited. Three thousand five hundred tons of base oils from Korea to the U.S. Gulf are still hoping to find end of June space. It has been busier on the biodiesel front to Europe, with a bunch of 3,000 tons to 6,000 tons requirements noted from China and Korea. Twenty thousand tons to 30,000 tons of sulphuric acid was mentioned Korea to Jorf Lasfar, Morocco, for July. Three thousand tons of base oils have been quoted into the East Mediterranean, seeking the next available ship.

It is rather quiet in the regional markets amid the sabre-rattling between the U.S.A and Iran. There is a lot of base oil on the water from Yanbu, Saudi Arabia, and Jeddah, Saudi Arabia, to India, but few new requirements. Six thousand tons to 9,000 tons of benzene was quoted from Sohar, Oman, to Jubail, Saudi Arabia, and to Shuaiba, Kuwait, and 8,000 tons pyrolysis gasoline was spotted from Dahej, India, to Sohar. Eastbound is seeing a bit more methanol activity, with 10,000 tons fixed from Mesaieed, Qatar, and several larger lots quoted to different Asian destinations for July. Westbound saw 5,000 tons to 6,000 tons of benzene quoted from Yanbu, Saudi Arabia, to Houston, as well as 15,000 tons of methyl tertiarybutyl ether which was quoted from Mesaieed to Antwerp-Rotterdam-Amsterdam. Twelve thousand tons of canola oil from Jebel Ali, United Arab Emirates, to Rotterdam was an unusual quotation.

This report was originally featured in the June 19 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 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.