SSY Base Oil Shipping Report


The market out of the U.S. Gulf is slow but not quite as fragile as before. Europe is struggling with a massive oversupply of tonnage and poor demand, while Asia remains the brightest of all regions.

U.S. Gulf
Cargo volumes out of the U.S. Gulf are still well below the levels that would be expected for the time of year, but there are one or two indicators that suggest flows are very slowly picking up.

U.S. Gulf to Far East for instance is tight on June space, which is surprising since spot market orders have been minimal.

Instead, contractual demand has taken care of the space, which owners will feel relieved about since spot freights for 5,000 ton parcels from Houston to Mainport Far East are still in the mid-high $40s per ton.

Transatlantic Eastbound continues to log styrene and benzene enquiries, the rates for which are still low-mid $40s/t for 5,000 ton parcels from Houston to Antwerp-Rotterdam-Amsterdam. U.S. Gulf to Caribbean rates are largely unchanged too.

We do detect some downwards pressure on rates for larger cargoes from the U.S. Gulf to east coast South America, namely 10,000 tons or above. Here, levels have slipped into the high $30s/t for a 10,000 ton cargo from Houston to northern Brazil.

Smaller parcels however are less attractive, and 2,000 ton cargoes from Houston to Brazil will cost from $65 to $75/t, depending upon timing and ports.

Unfortunately for ship owners, Europe remains a tricky area from which to escape. Given the choice, owners would prefer to reposition the ships east of Suez, but most firm orders attract at least half-a-dozen keen candidates, ensuring freights stay highly competitive.

For instance, we saw a 5,000 ton cargo from Rotterdam to Jebel Ali draw offers in the upper $60s/t. Vegetable oils have been active from the Black Sea to east coast India, but rates have remained in the low to mid $50s/t for 10,000 tons.

There is very little heading out to the Far East, with the result that some owners who would normally send their ships in that direction are openly advertising to keep the vessels within European waters, much to the consternation of ship owners who regularly trade along the coast.

Transatlantic westbound looks unappetizing too. The occasional caustic or alkylate parcel has been shown, but earnings are poor. For example, an 8,000 to 10,000 ton cargo from the western Mediterranean to the U.S. Atlantic Coast yields no more than low $30s/t.

Space is essentially tight from Asia westbound to Europe. Benzene has been showing yet again, as well as to the U.S. Gulf, providing a rate in the upper $60s/t for Europe and low-mid $50s/t to the U.S. Gulf for 10,000 to 15,000 ton lots.

Sulphuric acid to Chile accounts for a lot of stainless tonnage, the rates for which are in the low to mid $60s/t for 18,000 ton cargoes.

Palm oils are also experiencing a touch more demand from India, lifting freights into the mid $20s/t for 12,000 ton cargoes from the Malacca Straits to west coast India.

The market out of the Middle East Gulf and India is buoyant and space tight. Methanol, glycols, benzene, pyrolysis gasoline and caustic have been enquiring to move westbound, with freights working out at around $65 to $70/t for 5,000 ton cargoes into the Mediterranean.

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 fix@ssychems.comor +1 203-961-1566.

Related Topics

Market Topics