SSY Base Oil Shipping Report

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There has been a touch more business in the U.S. Gulf, and the same seems to be the case in Asia. European markets are largely unchanged however. There will undoubtedly be a massive impact for all regions following the drone attacks in Saudi Arabia this week, but it is still too early to see how it will all take shape.

Americas

Cargo volumes have been fairly routine to the Caribbean this week. Nine thousand seven hundred and fifty tons of ethanol from Houston to Kingston, Jamaica, is said to have been fixed for a lumpsum freight in the low $200,000s. A further shipment of 12,500 tons of ethanol was booked to Barranquilla, Colombia, and Cartagena, Colombia. Four thousand five hundred tons of benzene was quoted from Coatzacoalcos, Mexico, to Houston or Antwerp-Rotterdam-Amsterdam. One thousand one hundred and fifty tons of 5gr base oils were booked from the U.S. Gulf to Cartagena for loading at the end of the month.

Not all the business that has been quoted into South America has materialized. The tender for 5,000 tons of styrene to Santos, Brazil, for example appears to have faded away. Similarly, the requirement for 4,000 tons of caustic to Paranagua, Brazil, has been withdrawn without fixing. However, the caustic and ethylene dichloride combination to Maceio, Brazil, for mid-October is believed to have been booked and 4,000-6,000 tons of urea ammonia nitrate from the U.S. Gulf to Chile was put on subjects. There is a fresh requirement for 10,000 tons of ammonium thiosulphate from Pasadena, California, to Argentina for October. Three thousand tons of base oils from Pascagoula, Mississippi, to Rio de Janeiro were quoted for the end of September. Traders have been looking at 1,000 tons of base oils from Rio de Janeiro to Rio Haina, Dominican Republic, for the end of September.

There is a good level of spot demand on the eastbound transatlantic route. Styrene has been kicked around already for a few weeks, and there have been some glycols too. A new potential Contract of Affreightment saw monthly shipments of 6,000 tons of glycol quoted from the U.S. Gulf to the Baltic for 12 months, commencing in January. Six thousand tons of cumene was quoted from Houston to Antwerp, Belgium, and 3,000 tons of ethylbenzene was quoted from Mississippi to Antwerp-Rotterdam-Amsterdam or Gonfreville, France. Six thousand tons of used cooking oil from Newark, New Jersey, to the east coast of the United Kingdom reportedly finalized in the $60s per metric ton. Five thousand to 6,000 tons of reformate was seen from Paulsboro, New Jersey, to Antwerp-Rotterdam-Amsterdam.

Two thousand tons of base oils were looking for space from Houston to Haifa, Israel, and 8,000 tons of caustic was seen from the U.S. Gulf to the Adriatic. Others were looking at 15,000-20,000 tons of caustic from Point Comfort, Texas, or Lake Charles, Louisiana, to Italy and or Turkey, but charterers freight ideas were substantially lower than those of the owners. Another trader was checking freights on caustic from the U.S. Gulf to Greece.

Demand to Asia remains rather thin, keeping freight rates depressed. Five thousand tons of styrene is understood to have been fixed, and seemingly a few other styrene requirements have surfaced. Ethanol is generating some trade into Asia, and 11,850-15,800 tons was heard fixed from Houston to the Philippines in the high $60s/t. Several traders are quoting 15,000-18,000 tons of ethanol from Oregon to South Korea. Ten thousand tons of ethylene dichloride fixed from the U.S. Gulf to South Korea.

Sixteen thousand tons of used cooking oil to yellow grease was quoted from Norfolk, Virginia, and New Orleans, Louisiana, to Singapore for the first half of October. In addition, a further 4,000 tons of yellow grease was quoted from Vancouver, Canada, to Singapore. Fourteen thousand tons of soybean oil from New Orleans to South Korea looks to have gone at $58.50/t. Several traders have begun to evaluate shipping glycols to China from Lake Charles, Louisiana, and Houston.

Demand to India and the Middle East Gulf has been patchy. Ten thousand tons of ethylene dichloride was worked to India but ultimately failed to materialize. A cargo of glycols was heard to have fixed on subjects from the U.S. Gulf to the west coast of India for Oct. 1-10. Traders have been working on an ethanol deal to India from the U.S. Gulf, which might firm up this week.

Europe

Activity levels are moderate along the North Sea and Baltic route, whereby most owners have been able to maintain some forwards momentum and keep their vessels employed for approximately the next 4-10 days ahead, with just a few ships covered through until October. Rates however remain on the competitive side as owners are primarily focused on securing cargo volume, almost regardless of the freight. Aside from a large shipment to Nigeria, base oils have been sluggish out of the Baltic, with just 5,000 tons fixed from Kaliningrad, Russia. Most Continental base oil shipments have been regular term supply agreements, although 2,100 tons that were booked Le Havre, France, to Amsterdam appears to have been a spot fixture.

Demand is fairly consistent, with some larger slugs of biodiesel getting done into the West Mediterranean and Black Sea. Caustic continues to move, with cargoes destined for Italy, Spain and Portugal. Five thousand tons of ethylene dichloride from Stade, France, to Aliaga, Turkey, continues to be quoted, as does 1,500 tons of styrene from Rotterdam, Netherlands, to Berre, France. A small parcel of paraxylene was booked from Antwerp-Rotterdam-Amsterdam to Iskenderun, Turkey. Four thousand to 5,000 tons of gasoline was noted from Antwerp-Rotterdam-Amsterdam to Mohammedia, Morocco, and there was some methanol to Portugal. Seven hundred tons of styrene was seen Antwerp-Rotterdam-Amsterdam to Tunis, Tunisia.

Rates have been firm on certain bits of business northbound. Low $50s/t were mentioned for 4,000 tons of pyrolysis gasoline from Rijeka, Croatia, to Antwerp-Rotterdam-Amsterdam and owners were quoting rates of $50/t for 5,000 tons of biodiesel from the Adriatic to Antwerp-Rotterdam-Amsterdam. Three thousand five hundred to 4,000 tons of acetic acid was booked from Bar, Montenegro, to Antwerp-Rotterdam-Amsterdam, and 9,000 tons of pyrolysis gasoline was heard fixed from the Black Sea to Antwerp-Rotterdam-Amsterdam. Five thousand to 15,000 tons of pyrolysis gasoline was mentioned from Tarragona, Spain, to Antwerp, Belgium, while 5,000 tons of pyrolysis gasoline from Priolo, Italy, to Antwerp-Rotterdam-Amsterdam fetched $230,000. Four thousand tons of toluene was covered from Priolo to Antwerp-Rotterdam-Amsterdam. Four thousand tons of base oils were booked from Augusta, Sicily, to Rotterdam, Netherlands.

Firm rates have also been noted in the West Mediterranean, with 5,000 tons of biodiesel fixing from Huelva, Spain, to the Adriatic for over $40/t. Five thousand tons of alkylate from Augusta, Italy, to Lavera, France, secured $140,000 and 3,500 tons of methyl tertiarybutyl ether from Fos, France, to Ravenna, Italy, fetched 136,000. Two thousand tons of biodiesel from Tarragona, Spain, to Genoa, Italy, was quoted daily for most of the week without getting covered. The market in the East Mediterranean and Black Sea has been disappointing however, with several ships unable to locate any cargo and therefore heading back to the West Mediterranean in ballast.

There was little cheer among owners on the westbound route. Methanol was perhaps the most interesting grade to be fixed, with cargoes going across from Marsa, Malta; Antwerp-Rotterdam-Amsterdam; Rostock, Russia; and Hamina, Finland. Eight thousand tons of toluene to mixed xylenes was attempted from Leixoes, Portugal, and Antwerp, Belgium, to Houston but charterers have very competitive freight ideas. Five thousand tons of benzene stream again circulated Italy to the U.S. Gulf. Aniline is being quoted to Houston for both September and October. Ten thousand tons biodiesel concluded from Hamburg to New York, seemingly in the vicinity of $27-28/t. Three thousand tons of FOK from Brindisi, Italy, to Galveston, Texas, attained just under $200/t, the product being similar to CBFS. Eight thousand five hundred tons of base oils were booked from Livorno, Italy; Cartagena, Spain; and Algeciras, Spain to the Caribbean, and some aviation gasoline looks to have been booked to the Caribbean too.

Trade in general has been slow to the Far East, yet a couple of traders were willing to pay a freight premium of around $80/t for 5,000-ton parcels of styrene from Antwerp-Rotterdam-Amsterdam to China, on the condition the cargoes would arrive in October. Only prompt loading could have ensured this, and it would seem there was only one vessel that could achieve this. Otherwise, 3,600 tons of 4gr solvents were from booked Havre, France, and Rotterdam, Netherlands, to Singapore. Three thousand six hundred to 6,000 tons of base oils may still be a possibility from Antwerp-Rotterdam-Amsterdam to Singapore and Ulsan, South Korea, for October.

Rates appear to be stable to India and the Middle East Gulf. Seven thousand tons of base oils were still quoted from Rotterdam, Netherlands, to Hamriyah, United Arab Emirates, and there are up to 5,400 tons of base oils from Antwerp, Belgium, to the west coast of India. Some hexane and acrylonitrile has been fixed from Constanza, Romania, and Aliaga, Turkey, and some polyol was quoted to Jebel Ali, United Arab Emirates.

Asia

There have been many prompt cargoes quoted in Northeast Asia, some of which will have been a direct result of the recent typhoons and which will keep freights looking firm for the rest of the month. Cargoes seen include methyl tertiarybutyl ether, solvent naphtha C9, C10, phenol, acetone, paraxylene, toluene, mixed xylenes, glycols, small parcels of clean petroleum and a large number of base oil shipments from Korea.

Business looks to be fairly routine southbound, and 8,000 tons of caustic was seemingly booked from Qingdao, China, to Vietnam in the high $20s/t, while others are known to have fixed cargoes of sulphuric acid. Three thousand tons of solvent xylene was quoted from Kaohsiung, Taiwan, to Vietnam and 5,000 tons of heavy naphtha was seen from Daesan, South Korea, to Singapore. Five thousand tons of methyl tertiarybutyl ether from Mailiao, Taiwan, to Malacca, Malaysia, has still to be covered. A couple of base oil parcels were quoted to Kosichang, Thailand, and Godau, Vietnam, from South Korea.

Space remains scarce northbound for September, keeping upwards pressure on rates for parcels. Several ships are known to be loading large cargoes of methanol to Taiwan, Korea and China. Six thousand tons of unconverted oil has still to fix from Dumai, Indonesia, to Ulsan, South Korea, and 3,000 tons of naphtha from Kemaman, Malaysia, to Zhuhai, China, has yet to conclude. A transhipment cargo of 5,000 tons of methyl tertiarybutyl ether was quoted from Singapore to Taiwan and several glycerine possibilities were quoted into China. Parcels of orthoxylene and paraxylene were circulated from Singapore to China and there were a handful of pyrolysis gasoline and mixed aromatics cargoes to be booked from Thailand.

There has been a little more spot activity around Southeast Asia, including some X-harbour Singapore movements, a bunch of smaller clean petroleum requirements and a steady procession of pyrolysis gasoline shipments from Batangas, Philippines. There have been exports of biodiesel to S.China and some large mixed aromatics cargoes were fixed to Hong Kong. Two thousand eight hundred tons of base oils from Thailand to Singapore were heard fixed in the low- to mid-$30s/t.

With hardly any space remaining for September on the transpacific route, but with little benzene seen so far for October, rates remain notionally unchanged. There seems to be interest again in sending sulphuric acid to Chile. There is a substantial amount of used cooking oil and various forms of biodiesel trying to make its way to Europe, tightening space availability and causing freights to nudge upwards. Owners also report that the market for chemicals parcels from China to Turkey is very active. An interesting parcel of 2,000 to 3,000 tons of acrylonitrile was seen from Ulsan, South Korea, to Antwerp-Rotterdam-Amsterdam. Twenty thousand tons of caustic concluded from Japan to Durban, South Africa.

The market felt quieter in the regional trades, and that was before the attack on the Saudi oil installations. Since then, many traders have preferred to wait to see what commodity prices will do. Unsurprisingly, the emphasis is on cargoes that do not originate in the Middle East Gulf, meaning thateastbound volumes are dominated by exports from India, whether it be paraxylene, benzene, glycols, pyrolysis gasoline or methyl tertiarybutyl ether. Some large parcels of ethanol were noted from Karachi, Pakistan, too.

A few cargoes of methanol, methyl tertiarybutyl ether and glycols were noted from the Middle East Gulf to the Far East. Five thousand tons of styrene from Al Jubail, Saudi Arabia, to mid-China was heard fixed at $48/t. Westbound sees steady interest in glycols to Turkey and Antwerp-Rotterdam-Amsterdam. A large cargo of caustic seems to have fixed into the Mediterranean, while traders battle to supply a bright stock cargo to Egypt from the Red Sea. One thousand five hundred to 3,000 tons of heart-cut benzene was attempted from Adabiya, Egypt, to Antwerp-Rotterdam-Amsterdam and there is 5,000 tons of phosphoric acid from Adabiya to Turkey and another 3,000 tons of acid to Spain. Twenty thousand tons of paraxylene was seen from Mangalore, India, to the U.S. or Mexico.

This report was originally featured in the September 18 edition of Lube Report Americas.

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.

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