SSY Base Oil Shipping Report


The U.S. Gulf is now very tight for the balance of the month and rates are rising. European volumes are building, but at a slow pace. Asian markets are reasonably buoyant.

U.S. Gulf of Mexico
As expected, the tonnage situation in the U.S. Gulf has tightened up considerably. There are still a number of fully-uncommitted ships around, but the number is decreasing fast. There are still ships too that are on berth and that might be able to free up some space. This applies to the Gulf-to-Caribbean run in particular.

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The picture for the other main routes is not so obvious.

The U.S. Gulf to the east coast of South America, for example, is heavily contracted, and owners are now seeking rates of low $50s/ton for 5,000 ton cargoes from Houston to Santos, a small increase over the previous week. Several caustic, styrene and ethanol cargoes are available, and, if taken by an outsider, there is a chance there may still be a bit of open space on the ship.

Transatlantic eastbound is also heavily booked, and freights for 5,000 ton cargoes from Houston to Rotterdam are pushing into the low $50s/t, which also represents a slight increase. Ethanol is very active back to Northwest Europe, and there are masses of vegetable oil, tallow and molasses quotations from the U.S. Gulf to the Mediterranean. A 9,000 ton cargo of aromatics from the U.S. Gulf to southern Spain was heard to have fixed in the low $60s/t, which is a very firm freight figure.

Space for December from the U.S. Gulf to the Far East is virtually full, with prompt requirements only eliciting offers from a handful of outsiders at very high levels. If these cargoes really do have to be moved then freights in the $80s and $90s/t will have to be faced. Looking ahead however, January sees more space opening up, and freights are back down into the high $60s and low $70s/t for 5,000 ton lots from Houston to principal Far East ports.

Cargo volumes continue to grow in the North Sea and Baltic regions, causing slightly tighter conditions. Southbound into the Mediterranean is a bit busier too with some large lots of MTBE, caustic, FAME and aromatics noted. Northbound is more of a struggle for owners however.

Intra-Mediterranean business is a bit busier, resulting in a greater number of ships that have fixed further ahead towards the crucial holiday period and year end. MTBE and methanol have been especially busy in this area.

Transatlantic westbound is generally quiet but with rates reported to be unchanged. A 5,000 ton cargo of aromatics from Antwerp-Rotterdam-Amsterdam to the U.S. Gulf went in the low $30s/t, which is a typical rate for this route right now.

Rates from Europe to the Far East are a bit firmer again as December tonnage fills out. There are a bunch of requirements, including phenol, acetone, orthoxylene, butanols and acrylonitrile. A large lot of ethylene dichloride is also heard fixed from Antwerp-Rotterdam-Amsterdam to the Far East. From the Black Sea there is a possible cargo of base oils to China.

Europe to India and the Middle East Gulf sees yet more pyrolysis gasoline, base oils and phosphoric acid, keeping rates at a steady level.

Cargo volumes in the domestic Asian markets continue to provide decent levels of employment for the Asian coastal fleet. Rates have not changed much this week, if at all.

The same is true for export business from Asia to the U.S. and Europe. Benzene is still mentioned as a possibility to the U.S. for January, whilst acetic acid, acetates and wax cargoes have been seen back to Europe.

Palm oil markets are healthy on the long-haul routes to Europe, Africa and the U.S., though numbers into India are no longer firming.

A renewed burst of activity westbound out of the Middle East Gulf-India region, that includes methanol, MTBE, caustic, base oils, benzene and ethanol, has caused space to tighten somewhat. Eastbound however has no such difficulty, with a number of ships available to offer full or part space to Asia.

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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