SSY Base Oil Shipping Report


Space has tightened in the U.S. Gulf with good demand for space reported on most routes. Europe has yet to experience any increase in volume associated with year-end inventory shifts. Asian markets are tight for prompt loading, a legacy of the storms.

U.S. Gulf of Mexico
Nearly every route out of the U.S. Gulf is reported to be busy. The glaring exception is the transatlantic eastbound service. In spite of a bunch of aromatics quoted to Europe, vessels that are on berth seem to be having difficulty in filling up.

Ethanol is one of the more active grades, as well as caustic that is being shipped back to the Mediterranean and Northwest Europe. It is fairly easy to fix 2,000 ton parcels from Houston to Rotterdam for just $60/t. U.S. Gulf-to-Caribbean is fairly busy, and U.S. Gulf-to-east coast South America continues tight for the rest of November.

Contractual volumes are strong, and this situation looks set to continue into December. From Houston to Santos, 3,000 ton parcels of easy chemicals have been going in the mid $60s/t. Rates on the U.S. Gulf to India route have slipped a bit.

Several outsiders have taken advantage of the recent number of spot cargoes to the extent that the scheduled carriers have been left with space. Toluene has been active on this leg, with 4,000 ton parcels from Houston to Kandla discussed between $80 and $85/t.

U.S. Gulf to Far East is where the majority of the action has been taking place. November space is very scarce, and several outsiders have been brought on berth.

As we predicted last week, freights have strengthened further, and we hear of 18,500 ton chemicals fixed from two ports in U.S. Gulf to two ports in China for just below $80/t.

Owners are now looking to achieve mid $80s/t, whether for 5,000 or 15,000 tons. One of the main reasons for the increased demand is that cargoes have to be loaded prior to Dec. 15 to arrive in China before the Chinese Lunar Holidays commence Feb. 3.

Several ships in the Mediterranean have taken advantage of a shortage of tonnage that is able to load vegetable oils from the Black Sea and are now able to boast of being fixed far ahead into December. These are the fortunate few.

Demand has continued to be poor in many other areas of Europe, and there are still plenty of prompt open ships. In Northwest Europe and the Baltic, the fleet is fairly well occupied on contractual volumes, but there are always gaps in the program that allow some prompt fixing.

The resumption of trade in and out of France has largely been beneficial to the European fleet, with a certain amount of pent-up demand giving a bit of a boost. On the whole, however, rates across Europe have been highly competitive and with no decrease in the amount of open tonnage available things look set to continue in this fashion for a while.

Westbound transatlantic remains slow with very little demand. Rates are holding at unchanged levels, which is effectively in the low $30s/t basis for 5,000 ton parcels from Rotterdam to Houston.

Europe to Asia is dull and lacking any sizeable cargo volumes. For example, 1,000 ton parcels from Antwerp to Taiwan have been fetching around $90/t, with 3,000 tons paying between $80 and $85/t.

Numbers into the Middle East Gulf and India are weak since there are many owners who would prefer to have their ships in an area where finding employment is a bit easier. For example, 10,000 ton cargoes of pyrolysis gasoline have been going from Central Mediterranean to United Arab Emirates for very low $40s/t.

The aftermath of Typhoon Megi is still being felt across northeast Asia in terms of delays and port congestion. As such, finding prompt space for cargoes within northeast Asia has been arduous and thus causing freights to firm a little within the region.

Southbound into southeast Asia has been a touch quieter whereas northbound sees healthy demand for methanol, toluene and styrene. Export business continues to see benzene shipments to the United States and sulphuric acid movements to the Americas.

Palm oil volumes to Europe are reasonable, though trade to the Indian Ocean was put on hold during the Diwali festival at the end of last week.

The market from the Middle East Gulf-to-India region may have taken a bit of a nose dive thanks to a growing number of open ships in the region. Traders are finding it ever tougher to market Iranian material, especially into Europe, and as those volumes diminish the owners have to compete for other cargoes.

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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