SSY Base Oil Shipping Report


After the initial rush of the new year, activity seems to have declined in most areas, but not massively. Rates on some routes out of the United States and Europe fell, but higher levels are being paid from Asia and the Middle East Gulf to India.

U.S. Gulf of Mexico
The number of smaller units open in the U.S. Gulf has declined, which has prompted a slight increase in freights from the Gulf to the east coast of Mexico and also in the Caribbean. Furthermore, freezing temperatures in the U.S. Gulf caused a number of plant and terminal shutdowns last week, disrupting traffic through some ports.

Without a wide selection of tonnage open in the region, finding suitable ships for base oils from the U.S. Gulf to Lagos could be a problem, or at least a pricey one.

Spot demand is erratic from the U.S. Gulf to the east coast of South America and a couple of ships do have space. Freights are roughly unchanged on this service.

Eastbound transatlantic is steady. Demand is not hectic and the occasional vessel can offer space at levels akin to last-done, namely low-to-mid $40s/t for 5,000 tons from Houston to Rotterdam. Interestingly, biodiesel traffic to Europe seems to be gaining ground once again, but this time it is for product of U.S. origin and not the imported material simply being re-exported.

In the face of lower demand, numbers have fallen on the U.S. Gulf-to-Far East route for January loading. From Houston to China, 5,000 ton cargoes are down to the mid $70s/t, but February cargoes are beginning to appear, mostly for aromatics. If this business becomes firm then rates will recover, but if not then there are just speciality chemicals remaining which will be insufficient to stop numbers sliding further. U.S. Gulf to India remains robust with levels in the mid $80s/t for 5,000 tons from Houston to Mumbai.

The fuels market in the North Sea and Baltic continues to enjoy a period of plentiful cargoes. The situation is not shared by the chemical market however, where some ships have been tempted by better-paying oil cargoes.

Ice has spread further in the Baltic and ice 10 to 20 centimeters thick is reported in Svetly. It has also spread further down the Baltic into Poland and parts of Denmark even, although freight levels have surprisingly remained largely unchanged – 1,000 tons of base oils from Kotka to Antwerp would cost around 35,000 currently, for example, and there are 15 to 25 centimeters of ice in Kotka.

Down into the Mediterranean is pretty stable, and the same is true on the northbound leg. Inter-Mediterranean business has subsided somewhat, and owners are finding it difficult to string together a reasonable forwards programme. From Spain to Turkey, 3,000 tons of base oils would cost something in the mid $30s/t probably.

Transatlantic is not busy but there is not a huge amount of open space either. Rates are unchanged, either from Rotterdam or from the Mediterranean. Europe-to-Far East rates are down a bit, owing mostly to the amount of uncovered space still in January and February. Europe-to-India is up however, with good demand seen for acids, pyrolysis gasoline, vegetable oils and aromatics. Some owners are charging rates in the mid $70s/t for 5,000 tons of base oils from Rotterdam to Mumbai, but we see those levels are negotiable and depending upon the position and dates, numbers in the mid $60s/t may be achievable.

Inter-Asian rates have mostly rolled over from last week. Space has tightened marginally on Asian outbound business, probably because of healthy palm oil demand that sees numbers now topping $60/t for 15,000 ton cargoes from the Malacca Straits to Rotterdam. Levels are firm on business into India too, and figures above $50/t are applicable for base oil cargoes from northeast Asia to Mumbai.

Base oils from southeast Asia into the western Mediterranean would pay around $70/t, based on 5,000 to 6,000 ton cargoes.

The Middle East Gulf-to-India route is lively with good cargo possibilities east and westbound, as well as plenty of small parcels in and around the region. Space can be seen eastbound, but owners are looking for levels in the high $50s or low $60s/t for 3,000 tons of base oils from Iran to the Far East.

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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