SSY Base Oil Shipping Report


In contrast to the previous week, the second week of August reminded the shipping market how quiet things can be during summer. The main areas of excitement have been from the U.S. Gulf into the Far East and some of the routes out of Asia and the Middle East.

U.S. Gulf
By far the most important news from the U.S. Gulf is the sudden wave of cargoes that were fixed into Asia. Something like 60,000 tons of styrene and benzene/toluene/xylene was fixed with just one ship owner over the course of a couple of days.

Other ship owners took their share of benzene/toluene/xylene and styrene too. The rates for these cargoes were in the $40s per ton for 10,000 ton slugs from the U.S. Gulf to Mainport Far East.

Plenty of special grades that need sensitive handling were also booked, such as phenol, acetone and ethanol. Rates for 6,000 tons from Mobile, Ala., to three or four ports in China are said to be in the $70s/t. In spite of the fixing bonanza, there are still ships out there that have space into the Far East from the end of August through early September.

Transatlantic is a smaller version of the Far East route. Benzene and xylene have been frequently seen on the cargo lists. Styrene, cumene and cyclohexane also feature. However, the Arbitrages are fickle and cargoes are there one moment and pulled the next. Owners tend to be sticking to levels in the $45 to $46/t region for 5,000 ton parcels from Houston to Antwerp-Rotterdam-Amsterdam.

U.S. Gulf to east coast South America has been busy too. For example, 5,000 ton cargoes from Houston to northern Brazil are in the mid-high $40s/t, but attempt to go anywhere other than a main port and these levels rise rapidly into the $60s/t.

To sum up the U.S. Gulf at the moment, there are plenty of cargoes available in all directions and just a handful of ships to carry them all. There are, however, very few fixtures, and this small group of ships is becoming increasingly frustrated at finding a firm cargo. Firm business will therefore inevitably produce some exciting and very competitive freight levels.

Things have been very thin this week in Europe. The North Sea and Baltic spot market fell away, as did the trade in clean petroleum tankers up to 15,000 dwt. In most cases, rates have been done either at the same level, or slightly lower than the previous bookings.

Mediterranean markets too have been under a lot of pressure, and routine cargoes have seen numbers fall. Westbound transatlantic has not been able to gain any momentum. Occasional cargoes of naphtha, caustic, ethylene dichloride and urea ammonia nitrate have been booked, but they lack real substance.

Numbers for medium range tankers are such that traders are better off squeezing on a parcel of 15,000 tons of reformate, for example, rather than fixing a single shipment.

Europe to the Far East has seen steady demand but nothing exceptional. Cargoes included butanols, acryloniltrile, acetone and phenol. We hear of 3,000 ton parcels from Rotterdam to Mainport Far East going in the mid to high $80s/t.

Trade with China seems for now to be going in the right direction and we are seeing lots of intra-Asian requirements. Much of this trade is for aromatics, pygas or styrene into China, but there are also many requirements southbound into southeast Asia, namely caustic, ethanol, gasoil and aromatics.

Space has been hard to find outbound for exports to Europe or the United States, and some of the levels being reported for palm oil in the 10,000 to 15,000 ton sizes are 10 to 20 percent higher than in July.

Palm oil trade with China seems to be slightly busier too. Sulphuric acid is a key commodity from Asia, and there are requirements into Morocco, South America and the U.S. Gulf.

Caustic demand too is picking up, and traders are looking at larger cargoes into the U.S. Gulf or Brazil. For example, 20,000 ton cargoes from China to the U.S. Gulf have seen numbers in the vicinity of $65/t.

There have been reports of some very high numbers being done of cargoes from the Middle East Gulf to the Mediterranean and Europe. Space is very scarce westbound and the cargo lists packed with enquiries for large lots of methanol, glycol and aromatics.

Eastbound space remains easier to locate, although many ships that do end up in this region do not have the necessary oil company approvals.

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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