SSY Base Oil Shipping Report


Demand is still surprisingly robust throughout Europe and the Americas, with only Asia recording a slight deterioration in freights. There is a general view that this situation cannot last, with some observers suggesting that the onset of Q2 pricing and the Easter holidays may apply the brakes and that the number of new ships scheduled for delivery still within this year will wreck the chances of any solid revival.

U.S. Gulf of Mexico
March space is extremely scarce in the U.S. Gulf. There are, however, a couple of ships still open very end March, early April.

The end of last week saw a sudden spurt of interest among traders to ship benzene, cyclohexane and glycols to Europe, the effect of which was to cause owners to add at least $5 per ton to their already inflated freight ideas, and it was common to see $60/t offered for a 5,000 ton cargo from Houston to Rotterdam. However, very little of this material went beyond enquiry level, and with the arbitrages loosening, the same ships are still open this week. Arbitrages are always fickle, and it is possible that they will reopen, whether for benzene or styrene, but for now the space is still there.

The U.S. Gulf-to-Far East is another route where there is no open space this side of mid April. However, there is no sudden demand for spot material on this route, much of the space being taken contractually. Rates are firming as a result, but only notionally, and we would assess a 5,000 ton cargo from Houston to principal ports in the Far East as still being sub-$60/t.

U.S. Gulf-to-Caribbean and to the east coast of South America are routes that are equally tight, and numbers are nudging upwards by a couple of U.S. dollars. In the case of Houston-to-Santos, expect to pay low $50s/t for a 5,000 ton cargo of base oils.

European routes have again been active, especially in the North Sea. Typical 4,000 ton cargoes from northern France to Antwerp-Rotterdam-Amsterdam are now paying around $90,000, an increase of some $5,000 over the week. Ice is still an issue for some Baltic loading ports, and 5,000 tons of base oils from Liepaja to Rotterdam will cost around $30/t.

Southbound into the Mediterranean is full of cargo possibilities, keeping rates firm into the western Mediterranean especially. There are, however, some ships with space in Turkey that could still take 2,000 tons of base oils from Antwerp to Gebze for around $70/t. Inter-Mediterranean business is on the whole fairly busy, but with so many ship trading in the region, it is always easy enough to find one or two for most requirements at unchanged levels.

Transatlantic westbound has seen a decline in the amount of cargo volume, which has been reflected in the drop in freights. We now see 5,000 ton cargoes from Rotterdam to Houston as paying high $30s/t. Demand is strong into the east coast of South America from Europe, with plenty of acids, paraffins, pyrolysis gasoline, methanol and base oils being done. Rates for 5,000 ton cargoes from the western Mediterranean to northern Brazil are mostly around $70/t.

Europe-to-Far East is quite tight on prompt space, with most ships only showing up in the second half of April. Typical numbers from Rotterdam to China are in the low-to-mid $80s/t for 5,000 ton cargoes. The same cargo into the west coast of India would fetch around mid $70s/t.

In spite of some decent requirements of aromatics into China, freight rates in this region took a bit of a knock, with levels coming off slightly. Bad weather in China has been an issue for a long time, keeping tonnage tight, but as the weather improves, more ships are fed back into the marketplace.

Deep-sea exports remain primarily palm oils from this region, and the influx of tonnage into Asia has caused those rates to slip slightly. There is talk of styrene and benzene possibilities to Europe, and maybe benzene and caustic to the United States, but business is slow to firm up, at least to the U.S.

Rates to Europe continue to be strong for now, but it will have to be seen how much of this trade comes to fruition. The Middle East and Indian markets continue to be active and ships that are fully open are uncommon. Levels back into Europe and the Mediterranean are still very much in the $70s/t for 5,000 ton cargoes of base oil.

Adrian Brown is senior market analyst for chemicals and base oils with SSY Shipbrokers, London. Information about SSY can be found at Adrian Brown, in the U.K., can be reached directly at or by phone at +44 1207-507507. In the U.S., SSYs Steve Rosenthal can be reached at or +1 203-961-1566.

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