SSY Base Oil Shipping Report


The U.S. Gulf is saddled with a lot of open space keeping freights soft. Europe had another quiet week, as did Asia.

U.S. Gulf of Mexico
It is very apparent that cargo volumes from the U.S. Gulf have declined as many of the ships that were open last week are still open this week. The flooding of the Mississippi and the restrictions imposed on traffic, both sea and river-going, are probably the main causes and have implications on traffic through ports other than New Orleans.

U.S. Gulf-to-Caribbean is well supplied with tonnage at the moment, and with contractual volumes for June looking a bit on the light side it is expected that this situation will last for a while longer. Routes to the east coast of South America remain quite solid, and numbers are stable-to-firm.

Transatlantic eastbound however sees rates beginning to ease back. There are still cargoes heading to Europe, but they are mostly larger chunks of ethanol interspersed with a few smaller lots of aromatics and biodiesel. In several cases, once the base cargo has been booked, there is still some completion space remaining, and we have been seeing numbers in the mid $60s/t for 2,000 to 3,000 ton parcels from the U.S. Gulf to Antwerp-Rotterdam-Amsterdam.

U.S. Gulf-to-Asia paints a similar picture. Here too there is prompt space and if the ship happens to be calling at the same port to load for others it may be possible to secure low-to-mid $50s/t for 5,000 ton cargoes to principal Far East ports.

There has been a lack of business within Europe over the past week that has caused a lot of vessels to bunch up. The list of open tonnage in the North Sea and Baltic for instance is a long one, and we have seen rates begin to slide. The route into the Mediterranean has been tight for a long time, but now there are several ships from which to choose. Rates on this service are not giving way that quickly, however, as owners are unwilling to capitulate that easily.

The inter-Mediterranean market too is one in which it is much easier to find open tonnage, yet so far owners continue to hold out for the same terms as before. Their case rests on the cost of bunker fuel, the prices for which have not decreased by much.

Westbound transatlantictrades have been sporadic. There has been quite a lot of urea ammonia nitrate and a couple of new pyrolysis gasoline and caustic cargoes over the past week, but generally volumes are still poor and rates remain weak. The exception seems to be Mediterranean-to-United States where there is a shortage of suitable ships, and owners have been able to secure rates in the upper $60s/t for 5,000 to 6,000 ton cargoes from the western Mediterranean to the U.S. Gulf, for example.

Europe/Asia remains dull, and there is a variety of tonnage available for June loading.

Domestic Asian trades are quiet. Chinese demand remains lacklustre at the moment, especially for aromatics. Only a few cargoes of toluene and pyrolysis gasoline were seen looking to ship into China for example. Styrene has popped up, but only within Southeast Asia . Styrene exports seem to be on hold too, the price differential with Europe narrowing during the course of the week.

Traders have been exploring the possibility of sending benzene from Asia to the U.S. Gulf, and further large cargoes of sulphuric acid have been quoted into Chile, Brazil and the U.S. Gulf. From Korea to Antwerp-Rotterdam-Amsterdam, 5,000 ton cargoes are typically mid $80s/t and mid-to-high $50s/t to the U.S. Gulf.

The main area of activity centres on India and the Middle East Gulf, where there is still a sizeable demand for space both east and westbound. Cargoes of methanol, MTBE, paraxylene, benzene and ethanol are common, with levels for 2,000 to 3,000 ton parcels from the Middle East Gulf to the Mediterranean going for around $115 to $120/t and in the high $60s and low $70s/t towards Southeast 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 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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