SSY Base Oil Shipping Report


In a repeat run of the previous week, the markets in Europe and the U.S. Gulf have been very subdued, with the long-haul routes most seriously affected. Asian markets meanwhile continue to be fairly upbeat.

U.S. Gulf of Mexico
There has been very little chartering taking place over the past week from the U.S. Gulf. It is not that there a complete lack of business, but more the fact that the majority of cargoes are 5,000 tons or less, and such cargoes are considered too small for an owner to commit to putting a ship on berth. There are no guarantees that completion cargoes will be found that would match the dates of the ship, exposing the ship owner to a great risk. With so little firm business getting resolved, rates can notionally be carried over from the previous week.

It has been a very flat end to the month in Europe. The numbers of open ships just continues to grow, and with hardly any product to ship to deep-sea destinations, ship owners will seriously begin to question whether it is worthwhile chasing business at todays levels. For some, the undisputed option would be to lay-up their ships. It is a very tough call, but with operating costs starting to rise again on the back of stiffer bunker prices, it is one that we fully expect.

For most, it should be a short-term situation until the market redresses itself. Others will hope to take advantage of the quiet spell and will happily put their ships into dock for annual repairs and maintenance. As with the U.S., rates out of Europe are notionally unchanged this week.

The lack of inbound cargo and hence fewer ships inbound is having a slightly firming effect on rates on business back out again from Asia. Benzene, styrene and possibly toluene all see arbitrage possibilities to move to Europe, but open space is fairly limited, especially into some of the more obscure ports.

At this stage, there is still sufficient space to main ports such as Rotterdam, and in such instances rates are still in the low-mid $70s/t for 5,000 ton cargoes. Benzene is flowing from Korea into the U.S. Gulf, too, thereby keeping freights firm in the $50s and $60s/t. Palm oil shippers too sense a stiffening of rates, whether just to India or China or whether for the bigger lots to the U.S. or Europe.

Regional Asian activity is steady, with demand/supply of tonnage well balanced. India and the Middle East Gulf region are busy with plenty of cargo both east and westbound. Freights to ship 3,000 tons of base oils from Iran to Turkey are hovering around $95 to $100/t for instance.

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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