SSY Base Oil Shipping Report


The U.S. markets show no real improvement, but they have not dropped further. Europe has been slow, with many people away attending a trade event. Asia is starting to move in the right direction, but it needs more impetus to push it to the next level.

U.S. Gulf

The Far East route is dominated by large cargoes of methanol and ethanol. The methanol is going in 30,000 tons sizes for around $40 per metric ton to China, while the ethanol is going to outports such as Subic Bay in the Philippines. Traders have been chewing over the possibility to move styrene, but little has developed so far. It is the same too for the small parcels of glycol and phenol that have been attempted. A large lot of paraxylene is under scrutiny too, but no base oils are present.

Methanol is present in a big way on the eastbound transatlantic route too. Twenty thousand tons of methanol fixed from Beaumont to Rotterdam in the mid $30s/t, and this is more or less the same rate recorded on another 20,000 tons that was fixed from Trinidad to Rotterdam. There is some space around, but it is nothing out of the ordinary. Demand does not show any real sign of weakening, and includes cargoes of paraxylene, mixed xylenes, cyclohexane, caustic, ethanol, vinyl acetate monomer, lysine, neodene, metaxylene, biodiesel and vegetable oil.

There has not been a great deal happening in the Caribbean. Sticking with last weeks theme of methanol, 12,000 tons to 13,000 tons of methanol finalized from Trinidad to the U.S. Atlantic Coast at $34/t. The occasional shipment of caustic and ethanol has come to light, and molasses and palm oil are still moving regularly, but base oils have been muted.

Space is available here and there on a couple of prompt ships heading down to Brazil. Demand is sporadic along the route into the east coast of South America. Ethanol had been active until the past couple of days when it suddenly appears to have dried up. Styrene was being investigated to Manaus, Brazil, and a regular small parcel of 800 tons of base oils from Houston to Santos, Brazil, was looking for end of October space.

Ethanol has rejuvenated the route into India and the Middle East Gulf, and a couple of large bookings were made, including one shipment of 40,000 cubic meters to India at $1.55 million, and a smaller lot of 20,000cbm, which went in the mid $50s/t. Various parcels of glycol and aromatics have been noted, and 7,000 tons of acetic acid seems to have fixed from Texas City to the west coast of Italy, but it went quiet on the Paulsboro, U.S., base oils tender.


During theEuropean Petrochemical Associationevent, which took place in Vienna last week, there was very little appetite for fixing cargoes, and that caused many vessels to come precariously close to being open without any further employment. Things have picked up marginally since, but it is still a long way from being busy. Base oils, however, have been active, especially from the Baltic, with cargoes being loaded from Gdansk, Poland, Liepaja, Latvia, Riga, Latvia, and Kaliningrad, Russia, as well as the usual flow back up into the Baltic with base oils for major producers.

There is a lot of tonnage already on berth southbound to the Mediterranean, and furthermore, there are other vessels that have still to book return cargoes, making the route quite competitive at the moment. Base oil fixing has predominantly been regular movements for producers, but traders are persevering with trying to fix 2,000 tons of base oils from Rotterdam to Morocco. Other fixtures include products such as paraxylene, orthoxylene, ethanol, caustic, styrene, biodiesel and vegetable oil.

There have been fewer cargoes of aromatics over the past week or so along the Northbound Route, and, whilst there have been a steady flow of biodiesel from the West Mediterranean, Adriatic and Black Sea, it is insufficient for all the ships around. Some benzene and pyrolysis gasoline has been done nevertheless, and a cargo of methanol is going up to Rotterdam from the Black Sea, but otherwise demand has been mostly routine.

It has been a slow week within the Mediterranean, and the amount of prompt open space is causing freights to weaken. Biodiesel volumes have reduced considerably and base oils are not as prolific as before. Caustic still maintains a good run, and vegetable oil is making it easier for ships to get back out of the Black Sea. Its just that there are too many vessels around, and that applies to the whole of Europe.

Several ships are on berth westbound and still have to fill their last remaining tanks within October, but with aromatics off the boil it is not easy. Large bulk commodities such as urea ammonia nitrate, biodiesel and acid have provided the bulk of employment. On the base oil front, 10,000 tons of base oils were booked to Cuba from Cartagena, Colombia, and it is suspected that a further 4,000 tons that are coming down from the Baltic will be transhipped onto the vessel in Gibraltar. Eleven thousand tons of hydrocracker bottoms were mentioned going across to Lake Charles or Houston from Flushing earlier in the month, and 2,500 tons of base oils fixed from Antwerp to Houston in the high $60s/t.

Styrene has been the big draw on the Far East route over the past couple of weeks, with yet more material fixed. This does have the effect of bringing on berth additional vessels that then look for what else there is to fill out with, which at the moment is not a great deal, and this could cause freights to slip for what the owners might perceive as attractive combinations. Thirteen thousand tons of base oils fixed from Augusta, Sicily, to Singapore, seemingly at a knock-down level. Base oils are also being studied from the Black Sea to Hamriyah, U.A.E., and Singapore.

Several ships are heading out to India and the Middle East Gulf with remaining space unfilled, which will keep rates competitive.


This is probably the first week for quite a while in which a new typhoon has not been reported in the domestic Asia region. Things are slowly returning to normality, and whilst it is not causing a major boost to rates, owners are reporting higher levels of employment. Traditionally, the last quarter in the year does tend to stimulate trade, and a slight increase in freight has already been detected in the northbound market, with 3,000-ton parcels from Singapore to mid-China now touching $43-45/t. Elsewhere, rates are unchanged for now. Base oils have been moving steadily, if rather routinely within the region.

There is nothing too special occurring on the transpacific export route. Benzene had been discussed for the end of October or early November from Korea, and 10,000 tons of mixed xylenes has also been spotted from Korea to the U.S. Gulf. Between 11,000 tons and 12,000 tons of base oils from Singapore to Houston were reported to have gone in the mid $80s/t for October loading. To Europe, 11,000 tons to 12,000 tons base oils were covered from Singapore to Rotterdam at $63/t, while 6,600 tons of base oils from Malacca, Malaysia, to Antwerp fetched mid $60s/t. A further 6,900 tons of base oils have been quoted from Singapore to Rotterdam for November, with the option to increase with a small parcel to go to Santos, Brazil, en route. Four thousand five hundred tons of base oils from Korea to Le Havre, France, which is described as a regular cargo, were looking for an alternative carrier at one point, but may have reverted to the original vessel after all.

Demand is fairly typical for the regional market along the India and Middle East Gulf route, with lots of small parcels around, for which space is quite scarce, as well as larger lots of benzene, pyrolysis gasoline, styrene, methanol, methyl tertiarybutyl ether, ethylene dichloride, caustic and of course base oils, of which there are numerous near-identical enquiries. There has been a succession of fixtures from Yanbu, Saudi Arabia, as well as movements out of Al Ruwais, U.A.E., and Karachi, Pakistan. Eastbound is pretty busy and likely to become busier as the fourth quarter unfolds. Already there are enquiries to ship methanol, glycols, paraxylene, benzene, orthoxylene, styrene, ethanol, caustic and base oils. Westbound looks balanced. Several ships have part-cargo space, while parcels of benzene, paraxylene, caustic and ethanol have been quoted.

This report was originally featured in the Oct. 17 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.

Related Topics

Logistics & Distribution    Shipping