SSY Base Oil Shipping Report


Undoubtedly the rising cost of crude oil has caused petrochemical demand to slacken significantly in both the United States and Europe. Asia is still busy because of its lower commodity prices.

U.S. Gulf of Mexico
The market in the U.S. Gulf is much quieter all round. Prompt space is beginning to open up on some routes, such as U.S. Gulf to Far East. Owners are fighting hard to retain existing freight levels, but with so little happening it is hard to stop freights from eroding. From Houston to principal Far East ports, 5,000 ton cargoes have drifted down in the upper $50s/t territory, for example. Aside from some small parcels such as acrylonitrile, ethanol and biodiesel, there is little to excite on this route.

Transatlantic eastbound is beginning to look top-heavy too. Too many ship owners opted to head into the U.S. Gulf, and apart from ethanol, biodiesel and occasional aromatics cargo this route too is likely to see freight levels come off.

U.S. Gulf-to-Caribbean continues to be affected by fog in the Gulf that is causing owners to reshuffle their fleet programmes. Contract nominations remain quite high on this trade lane so that a moderate reduction in spot enquiry has no impact on freights.

U.S.Gulf-to-east coast of South America is reported to be busy with ethanol into Brazil, and with space already limited, there is not much chance that rates will slip greatly in the short term.

Contractual demand is holding well in the North Sea as is spot demand. Ice conditions remain severe in the Baltic with numerous ships running late after being stuck in the ice. Baltic freights remain strong for ports that require ice-class tonnage. Southbound into the Mediterranean is fairly active, especially with methanol, now that supplies from Libya and Egypt have been curtailed. Northbound sees plenty of open tonnage, and even a spate of pyrolysis gasoline and aromatics parcels has done little to dent the oversupply of ships.

In the Mediterranean, there is a curious mix of idle tonnage that mixes with ships that are well employed, illustrating well the pitfalls of allowing ships to remain open for too long. Freights on the whole within the Mediterranean are pitched at very competitive levels as a consequence.

Transatlantic westbound, whilst not really busy, has managed to create sufficient opportunities for ships, whether in caustic, pyrolysis gasoline, urea ammonia nitrate or base oils, that freights are roughly stable.

Europe-to-Far East is much quieter, and there are several ships in March that are seeking completion cargoes. Freights have dipped with 5,000 ton cargoes from Rotterdam to principal Far East ports fetching numbers in the upper $70s/t. There are still reports of base oils being fixed into Asia from Europe and the Mediterranean however.

Although commodity prices have risen in Asia they have not kept pace with Europe or the United States. As a result, there are good possibilities to ship pyrolysis gasoline, benzene, styrene, paraxylene and toluene back to Europe for instance. Furthermore, there are a lot of tricky cargoes such as acetic acid, phosphoric acid and paraffin wax that can pay high freights and so are cornering the tonnage supply. Space is fairly tight now, and although gaps can be found for March and April loading the levels are not cheap.

It is easier to find space to the U.S. Gulf, and for 5,000 ton cargoes from Korea, rates work out some $15 to $20/t lower than taking the cargo to Antwerp-Rotterdam-Amsterdam.

The Middle East Gulf-India region is also very busy right now. Rates are especially strong westbound to Europe – 2,000 ton parcels from the west coast of India or Pakistan to Turkey, for example, are collecting rates of around $105 to $110/t. Eastbound is not as frantic by comparison, but there are still a lot of uncovered cargoes, including methanol, aromatics, styrene and some base oils.

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 at or by phone at +44 1207-507507. In the London office SSYs Jordi Maymi can be reached at or +44 20 7977 7560.

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