SSY Base Oil Shipping Report


None of the main markets can claim to have been busy over the past week. At best, the vessel supply to demand picture in each region has not worsened, and it could even be said to have tightened slightly in a few areas, but overall, freights remain weak.

U.S. Gulf

August space is rather tight for the balance of the month on U.S. Gulf-to-Far East routes, partly because contractual volumes have stayed constant, but also because owners have taken steps to minimise the number of sailings on this route. It should not be difficult to find suitable space however among the many vessels that are effectively captive at the moment in the U.S. Gulf, with no place to go. These outsiders, however, are uninterested in starting off with 5,000-ton parcels, which means that rates for that size parcel are still in the high $40s, low $50s per metric ton to Korea, and a little costlier to China.

As expected, following the styrene plant outage in Europe, traders have been keen to send styrene across from the U.S. Gulf. August space is scarce on scheduled carriers, but only applies to scheduled vessels as there is otherwise space. Methanol, ethanol, cumene and glycols have been seen last week.

On U.S. Gulf-to-Caribbean routes, many of the smaller vessels in the Caribbean have managed to fix forward towards the end of the month, but there are still plenty of larger units. A base oil tender for 1,500 to 1,600 tons into Cartagena is awaiting a result. Several large caustic cargoes are moving in the region, and there has been ethanol up to Canada. Mexico is busy with imports of caustic and glycols, the rates for which are still tracking downwards, with 5,000-ton parcels being low $20s/t.

Base oils are still being seen into Brazil, and a couple of caustic cargoes have recently been quoted into Brazil. It has been quieter on ethanol, however, and it is unclear if any ethylene dichloride has been covered. Rates are stable for now.

Fewer base oil opportunities have been seen last week from the U.S. Gulf to India and the Middle East Gulf, seemingly because buyers there have been importing cheaper material from Asia. Ethanol, acrylonitrile and phenol has also gone quiet.


For a while, it seemed as though owners would clear the backlog of prompt space in the North Sea and Baltic region, but every time it looked as though this was happening, the market would slow and a new batch of prompt open vessels would appear. As it is, there are a few fleets which are almost done for August, but many more are booked only 5-7 days ahead. Spot activity has not been too bad on base oils, with several shipments out of the Baltic and a couple more going up into the Baltic.

Jitters about the Turkish economy and the collapse of the Turkish lira has caused a significant reduction in exports southbound to Turkey. There has not been a great deal of base oil moving into the Mediterranean, apart from deliveries to term customers. Owners consider demand overall to be subdued, yet fixtures concluded last week encompass methyl tertiary butyl ether, ethanol, reformate, paraxylene, biodiesel, caustic, sulphuric acid, pyrolysis gasoline, aniline and vegetable oil.

For the most part, rates have been stable on northbound routes, although a 10,000 ton slug of base oils from Augusta, Sicily, to Rotterdam seemingly went for $225,000, which is considerably less than any of the other owners would have accepted. A routine parcel of base oils is looking to move from Cartagena to La Rochelle. Otherwise, there were cargoes of butanol, benzene, molasses, styrene, pyrolysis gasoline, toluene, heavy aromatics, biodiesel, mixed xylenes, glycerine and caustic.

Base oils have again been well represented in the Mediterranean, with a number of movements recorded. Biodiesel has become a little more active too, and caustic and aromatics have been providing a fair amount of employment too. It is not busy within the Mediterranean, but nor is it completely flat either.

Some of the benzene enquiries have translated into fixtures on the transatlantic route over the course of the week, with levels heard around $30/t basis for 10,000 to 11,000-ton cargoes. Nine thousand tons of paraxylene was heard fixed on subjects from Rotterdam to Charleston and Wilmington, and 10,000 tons of biodiesel from Hamburg to the U.S. Atlantic Coast was also heard worked in the very high $20s/t. Eighteen thousand tons of sulphuric acid was booked from Ronnskar to the U.S. Gulf, and 13,000 tons of sulphuric acid concluded Bilbao to Cuba. Further sulphuric acid cargoes appear to have been covered, and there is a rumor that 12,000 tons of MTBE may have been booked Rotterdam to Point Tupper. Ten thousand tons of AdBlue was quoted from Sluiskil, the Netherlands, to the U.S. Atlantic Coast and U.S. Gulf for the end of August, and 3,000 tons of MDI from Antwerp to Houston was spotted. Seven thousand tons of vegetable oil went from Baltic to Cuba, and 7,000 tons of wax and lubes from Augusta to Baton Rouge, U.S., and Baytown were said to have gone in the $70s/t.

There is not much space remaining for August on the route from Europe to the Far East, but the withdrawal of styrene enquiries following the plant outage in Europe has caused some end-August space to open up. Four thousand tons of base oils were fixed from Antwerp-Rotterdam-Amsterdam to Singapore, seemingly in the $70s/t. Traders are otherwise looking at shipping mixed xylenes, acrylonitrile and acetone.

Owners continue to flood the route from Europe to India and the Middle East Gulf with space, keeping rates soft. With the exception of a large lot of mixed xylenes fixed to India, most requirements have been small.


Within Asia, a succession of typhoons and tropical storms have battered ports in Japan, China and Korea, causing numerous delays and even port closures. Consequently, there have been fewer cargo requirements quoted, as it will take some time for customers to take stock of how much material they have in-tank and how much will be required once cargo operations resume. On top of this, the devaluation of the Chinese yuan has caused some buyers to hold off from further purchases just now. Owners, from their side, report that space is almost gone for the rest of August in most of the areas, but with the slowdown in trade, rates will not strengthen.

Very little has been quoted on the transpacific route last week. Demand to Europeon the other hand has been strong, but all that has done is pull on more ships on berth, which then need completion cargo. Six thousand five hundred tons of base oils were fixed from Malacca, Malaysia, to Antwerp, reportedly in the high $70s or low $80s/t, which is up from previous shipments. Traders continue to check freight rates on parcels of base oil back to the Mediterranean.

It has been quieter in the regional markets last week, especially on exports out of the Middle East Gulf. Some methanol, styrene, glycols and ethylene dichloride have been seen moving in this direction, while aromatics have been flowing back from India. Eastbound is also slower on the spot market, though contractual volumes seem steady enough. Six thousand tons of styrene from Al Jubail, Saudi Arabia, to China is being marketed with ideas in the high $40s to low $50s/t. The westbound route is still quite active, with benzene and paraxylene routinely quoted. Some prompt requirements have been noted as contract vessels get delayed, and another 15,000 tons of caustic is understood to have fixed from Al Jubail to Mediterranean. Thirty thousand tons of benzene, toulene, and xylene 3-India to 3-Europe was heard fixed in the $50s/t.

This report was originally featured in the Aug. 15 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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