SSY Base Oil Shipping Report


The markets in Asia, Europe and the United States all got off to a fairly sedate start to the year. Encouraging signs have been seen on some, but not all, of the main routes in these areas. Things should become clearer over the next week or so.

U.S. Gulf

The market into Asia has been the fastest to recover after the long holiday season. January space is looking rather tight, and owners are aiming for a freight increase. Levels for 5,000-ton parcels have been hovering in the upper $60s per metric ton to Korea, but owners are now seeking mid $70s/t. In a number of confidential deals, rates well above $70/t have already been agreed for cargo sizes in excess of 15,000 tons. Between 40,000 tons and 50,000 tons of ethylene dichloride has been booked over the past week or two, and there are still fresh ethylene dichloride requirements quoted for January. Phenol is another grade in demand, while styrene and glycols are also featured. One outsider was able to fill their last remaining space with 6,000 tons of acrylonitrile and glycols. Ten thousand tons of paraxylene was noted to China. Ethanol is being quoted to the Philippines with even larger slugs quoted to China. Soaring methanol prices in Asia are also encouraging demand for methanol shipments from the U.S. Gulf and the Caribbean.

Spot demand along the transatlantic route is slow to get going, keeping freight levels contained. Styrene started off being quoted to Antwerp-Rotterdam-Amsterdam, but more recently traders have been looking to sell the product into the Mediterranean instead. Nine thousand tons of ethylene dichloride was fixed from the U.S. Gulf to Barcelona, and caustic and metaxylene were also quoted into Spain. A shipment of at least 15,000 tons of base oils has been fixed from the U.S. Gulf to Nigeria.

Caustic has started the year well in the Caribbean market. Eighteen thousand tons of caustic was fixed from the U.S. Gulf to Rocky Point, Jamaica, with a further shipment to Jamaica called for later in January. Ten thousand tons of caustic was also quoted into Matanzas, Cuba, and further caustic shipments are required into Barranquilla, Colombia. Apart from the tender for base oils into Punta Cardon, Venezuela, spot base oil activity has been thin, although contracts seem to be performing well.

Ethanol has dominated the route into the east coast of South America for the past couple of weeks, with a number of fixtures concluded. Between 15,000 tons and 16,000 tons of ethanol was fixed to North Brazil at $48/t, and there are some larger inquiries still outstanding. Several base oil possibilities have popped up this week, with just over 8,000 tons quoted to Rio de Janeiro from Pascagoula, Louisiana, U.S., and Houston, while a further 11,000 tons to 12,000 tons of base oils and chemicals has been noted to Brazil and Argentina.

It has been a busy couple of weeks on base oils to India. Twelve thousand tons fixed from Paulsboro, U.S., while a further 15,000 tons loaded from the U.S. Gulf. Further inquiries have been seen from both the U.S. Gulf and Paulsboro for later in January. On top of all that, ethanol, styrene and phenol have been noted this week.


It was a calm but orderly start to the new year along the North Sea and Baltic route. Most ships had a reasonable program that meant there was no carnage on day one, and cargoes started to progressively appear as people returned to work after the holidays. The Russian orthodox holidays are still ongoing,yet in spite of that there have been a number of base oil fixtures from the Baltic. Ice in the Baltic has not been much of an issue so far, with water temperatures in most base oil ports above freezing.

Southbound spot demand has not been too bad, but there is an abundance of open ships in the first half of January, which has caused rates to look rather weak. At the end of December there was a base oil fixture from the Baltic to Morocco, and 2,000 tons of base oils were fixed from Le Havre, France, to Haifa, Israel, but otherwise the base oils moved so far have been to term customers.

It has been a quiet start on the northbound leg. Aromatics have been patchy. There is still some interest in shipping 8,000 tons of pyrolysis gasoline from the Black Sea to Antwerp-Rotterdam-Amsterdam, but rate ideas are just $36/t, which is the level claimed on a 10,000 tons shipment in December. Four thousand tons of toluene from Leixoes, Portugal, to Antwerp-Rotterdam-Amsterdam was proving tricky to fix, with few suitable carriers available. The same too for 8,000 tons of aromatics from Priolo, Italy, but physical berth restrictions are always an issue here.

There has not been much prompt tonnage around the inter-Mediterranean route, but owners have been cautious, their priority being to ensure a prolonged forwards program for their ships rather than necessarily challenging rates from the outset. Base oil has been fairly active, with shipments to various North African and East Mediterranean destinations.

Early transatlantic January space was relatively tight, but many of the requirements that were quoted, such as toluene, mixed xylenes and pyrolysis gasoline faded as crude oil prices reacted to the tension in the Middle East Gulf. With little room to maneuver, owners gave in and took what they could get, such as sulfuric acid from Hamburg at just $26/t. Since then, a few new requirements of paraxylene have surfaced, and the arbitrage that were closed for the aromatics could re-open as prices fall into line.

The Far East route has been fairly busy with base oils to Singapore over the past couple of weeks. A shipment concluded from the Black Sea just before Christmas, and already the next shipment to the Middle East Gulf and Singapore has been booked for later in January. Rates are likely to have been close to $900,000. Between 6,000 tons and 7,000 tons of base oils were fixed from Antwerp to Singapore and Korea, and 5,000 tons of base oils were quoted from Leixoes to Singapore. A further cargo of 12,000 tons of base oils has been quoted from three ports in northwestern Europe to Singapore for early February.

There has been less interest from traders to ship small parcels of aromatics and solvents to India this week. Base oils, however, have still registered a number of inquiries from the Baltic and Mediterranean, while up to 10,000 tons were booked from the Baltic to India. Rates are looking flat presently.


As with most other markets worldwide, the first few days back to work were painful for owners as domestic Asia demand remained subdued. In the case of intra-Far East trade, for example, few aromatics cargoes were noted. The same was the case northbound, with just a few requirements of toluene, benzene and xylene noted. However, demand has been steadily building day-by-day, and now there are a number of large paraxylene and benzene requirements to be shipped from Korea to China over the next couple of weeks, while methanol, methyl tertiarybutyl ether and glycols have joined the northbound lists. Base oils have been fairly active in the middle of all this. However, it has been noted that charterers are looking to put some of the Chinese deliveries from Korea under a contract, whereas until now they have gone on the spot market.

It has been quiet on the transpacific export route, but given the uncertainty caused by price fluctuations in the energy complex this is not altogether surprising. Some paraxylene and mixed xylenes has been talked, but benzene remains shy. It has also been slow to Europe. Some small base oil shipments have been discussed into the Mediterranean and northwestern Europe, along with small lots of solvents and speciality grades. It is probably too early to discern if this reduction in demand is a new pattern.

It has been a busy period in the regional markets, and space is tight into India and the Middle East Gulf, though perhaps some of the tightness can be traced back to heavy congestion in a number of ports in the region. Space is tight on the eastbound route, with many requirements vying for space. Methanol seems to be driving the pace. Base oils have been checked from Al Ruwais, U.A.E., to China. Westbound is calm. Most of the smaller ships that were around were quickly fixed back to Europe, but chiefly with cargoes that originated from Iran or else are destined for outports in Europe. Owners of larger tonnage, however, say there is not a great deal for them to do right now.

This report originally appeared in the Jan. 10 issue 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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