SSY Base Oil Shipping Report


Overall, it has been a quiet week. Very little is happening out of the Americas. Europe too is floundering with more and more ships open with few firm prospects. Only Asia has fared well in terms of activity this week.

U.S. Gulf of Mexico
There are a number of ships that will be fully open after discharge in the U.S. Gulf at the end of May and first ten days of June. The problem is that most of these ships are larger vessels and their owners are unwilling to parcel up with cargoes of 5,000 tons or less. Rates across most of the export routes are therefore motionless this week, whether into the east coast of South America, Northwest Europe or Asia.

Perhaps for parcels into the Caribbean there may be some concessions as there are a lot of ships lining up for June, whereas the amount of contractual business is not that great looking forward at this stage. Numbers into the east coast of Mexico for example may slip slightly into the very low $20s/t for 5,000 tons.

In common with the majority of shipping markets around the globe, the Americas share the same volatility. For example, the arbitrage opportunity to ship benzene/toluene/xylene to Asia appeared very briefly, but after a day or so it had already closed. This route relies heavily on BTX, and space soon starts to build up without it.

It was the same to Europe. Benzene and styrene arbitrage opened and closed extremely quickly, but in end, hardly any material was committed as traders pulled out, fearing the exposure risk.

Prices for many chemical products are linked to the price of crude oil, and with crude falling the expectation among buyers is that chemical prices should fall. As buyers had plenty of opportunity to restock in the first three months of the year, we may be entering a phase when little is bought or shipped.

There was a discernible nervousness among European ship owners this week. Trade virtually dried up, at least on most of the deep-sea routes, and the coastal markets were looking grim for much of the time. Tonnage continues to back up in Europe, especially among the larger units.

Transatlantic produced very little new business, the main cargoes being caustic, hydrocracker bottoms, urea ammonia nitrate and sulphuric acid. Rates notched a couple of points lower, with numbers for 5,000 ton cargoes from Rotterdam to the U.S. Atlantic coast barely making it above $30/t.

The situation to the Far East is equally as slow, with hardly any noteworthy cargoes seen. Rates have not decreased yet, but owners may be able to recalculate and come up with more competitive numbers, using the cheaper bunker prices that are also a consequence of cheaper crude oil prices. Demand is a bit more positive to India and the Middle East Gulf and will likely support the current levels for now.

The appetite for aromatics has picked up a bit in China, with a number of xylene and pyrolysis gasoline grades being quoted from Southeast Asia. Reformate cargoes were also noticeable on this route, providing some coverage for the local Asian fleet.

Low commodity prices in Asia favour the deep-sea business too, with good demand seen for benzene to the U.S. Gulf and benzene and styrene to Europe. Rates are holding firm with levels in the $50s/t for 5,000 to 10,000 ton cargoes from Ulsan to the U.S. Gulf.

Sulphuric acid rates have seen further gains with 18,000 ton cargoes from Asia to Chile creeping above $60/t. Palm oil business into India and China is a bit busier too.

Trade out of the Middle East Gulf and India is fairly active. Cargoes such as methanol and glycols are more common into Europe, while paraxylene, orthoxylene, benzene, MTBE and methanol is creating opportunities eastbound into Asia.

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.

Related Topics

Logistics & Distribution    Market Topics    Shipping