SSY Base Oil Shipping Report


European markets have recorded a substantial increase in cargo volumes over the past week. Asia is so far coping with the influx of tonnage, which means rates have perhaps stopped rising. The Americas presents a more sedate picture.

U.S. Gulf of Mexico
U.S. Gulf to the Caribbean sees increased activity, both in terms of spot and contractual work, although pockets of January space can still be found. The amount of open space for February is beginning to diminish too, which ensures that rates in this area remain unchanged for now.

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U.S. Gulf to the east coast of South America has minimal space until the second half of February, and with plans to start exporting American ethanol to Brazil this space may disappear. So far however, rates show no sign of alteration.

Transatlantic eastbound is also seeing ethanol shipments to Europe. Space has tightened a lot on this route, and we estimate a 5,000 ton cargo from Houston to Rotterdam would cost over $45 per ton.

Rates have fallen dramatically on the U.S. Gulf to Far East service. Demand is poor, and with additional ships being scheduled onto this route in February we have revised our rates assessment to $60/t for a 5,000 ton cargo from Houston to main scheduled Far East ports. Space into India is limited, with owners asking for $90/t for 3,000 to 5,000 tons of base oils from Houston to the west coast of India.

A wave of chemical and biofuels business swept through the North Sea allowing most owners to fix well ahead and creating a mini shortage of prompt units. This market has been further bolstered by a busy fuels market in Northwest Europe and the Baltic, and we have seen some steamy freights for prompt lifting.

Ice in the Baltic continues to grow and thicken, even reaching Liepaja. Only ships with an Ice Class 1C certificate and above are permitted to call at Estonian ports from 26th January.

Southbound into the Mediterranean has seen a frenzy of new cargoes. Space however is usually available, at least with a bit of patience. Northbound has seen a burst of aromatics business, but finding space for most requirements is achievable. Some owners are seeking higher freights on these routes in and out of the Mediterranean, which means that having a flexible approach to loading dates usually results in the least pain financially for shippers.

Transatlantic westbound is attracting interest from traders willing to move benzene to the United States. Freight rates for 5,000 ton parcels from Rotterdam to Houston are pegged in the low-to-mid $30s/t, although February space looks to be tightening among the scheduled callers.

Europe to Asia can produce a bunch of ships with space in February. More aromatics have appeared for shipment on this route, but many of these quotations have still to firm up. Antwerp-Rotterdam-Amsterdam to the west coast of India has seen a sizeable number of new cargoes, with the result that some owners are readily quoting freights in the mid $70s/t for 5,000 ton cargoes from Rotterdam to Mumbai.

Rather more by way of aromatics cargoes were noted on the inter-Far East trades, as well as Southeast Asia up to China. The main effect has been to see space tighten somewhat in Asia, although it has not been sufficient so far to alter freights on any of the local trades.

There have been quite a few larger ships fixed into the region too, and now these owners are looking to send the ships out of Asia in February. Benzene has begun to appear from Korea and Southeast Asia to the U.S. Gulf, but this route is well served with tonnage and 5,000 ton parcels end up at around $55/t.

Rates on some palm oils into Europe and the Black Sea have seen figures in the $60s and $70s/t attached, but it is not clear yet whether these rates have peaked, given the additional tonnage being quoted open in Asia.

In the Middle East Gulf and India region too there are perhaps more ships quoted open, the result of the latest batch of edible oil and phosphoric acid fixtures. Consequently, rates eastbound from India and the Middle East Gulf to China and Southeast Asia have slipped by a small amount. Several ships can offer completion space too, and it may be possible to fill out with base oils from the Middle East Gulf to Southeast Asia in the mid $40s/t for 3,000 tons. Rates back to Europe and the Mediterranean are unchanged.

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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