SSY Base Oil Shipping Report


U.S. markets remain weak through tonnage oversupply. European coastal routes have picked up slightly but remain flat for long-haul business. Asian coastal routes are slightly busier, and deep-sea routes are tight and freights firm.

U.S. Gulf of Mexico
The chronic backlog of tonnage in the U.S. Gulf has caused a reduction of freights on several routes.

Transatlantic eastbound is one of the main arteries where numbers have dropped further. It is now possible to obtain freights in the high $40s/t, for example, for 10,000 ton cargoes from Houston to Rotterdam. Ethanol is probably the main commodity moving on this route. There have also been enquiries for one or two parcels of styrene and BTX, none of which is terribly firm.

U.S. Gulf-to-Caribbean and to the east coast of South America are stable with no great activity reported in either direction.

U.S. Gulf-to-Far East sees plenty of July space, but owners are talking in slightly more bullish tones, and freight levels have bounced up slightly from $49 to $50/t to the low $50s/t for 5,000 ton cargoes from Houston to principal Far East ports. Trade in aromatics has dried up on this route, but we have seen interest in cargoes such as acrylonitrile and mono ethylene glycol. July space can be found on the U.S. G-to-west coast of India trade lane, where 3,000 ton parcels fetch just over $100/t.

Business has been a bit brighter on the European coastal scene. Contractual business has improved, and space is tighter in some areas. In the North Sea and Baltic there are fewer open positions, although freight rates have not altered.

Southbound into the Mediterranean sees quite a lot of opportunity, whether benzene, paraxylene or FAME into the western Mediterranean or acrylonitrile, white spirit and base oils into the eastern Mediterranean. Northbound cargo lists have grown longer, especially from the eastern Mediterranean and Black Sea, boosted by cargoes of acetic acid, urea ammonia nitrate, vegetable oil and pyrolysis gasoline.

Inter-Med business is fairly busy, and prompt tonnage has become relatively scarce. Freight rates have generally stiffened in the region.

Transatlantic westbound is disappointing. Arbitrage possibilities are limited to just a few commodities, such as paraxylene, caustic and pyrolysis gasoline. Rate levels are somewhat notional, but 5,000 ton parcels from Rotterdam to Houston should be workable at around $40/t.

Europe-to-Far East is flat with minimal demand, the main grades being acetone, phenol, aromatics and surprisingly some base oils from the Baltic. Europe-to-India is a bit busier, especially with vegetable oils, pyrolysis gasoline and phosphoric acid, although freight rates have not budged.

July looks to be a more interesting month in terms of domestic Asian business. Paraxylene is busier within Northeast Asia, and styrene is being quoted within Southeast Asia, along with toluene,linear alkyl benzeneand solvent naphtha C9. Various parcels of caustic have been quoted from China to Southeast Asia.

Export trades are very busy with small parcels traffic. Space has become extremely scarce, with the most recent fixture of 1,000 tons of chemicals from China to Antwerp-Rotterdam-Amsterdam paying a colossal $190/t. Of the larger cargoes, there is quite some demand for palm oils and palm methyl ester for biodiesel usage, as well as some large slugs of sulphuric acid and paraxylene to the Americas.

The amount of business from the Middle East Gulf-India region, while still impressive, looks to be fractionally less. A number of plant outages are perhaps the main reason. Westbound continues to produce a fair amount of methanol demand into the Mediterranean and Northwest Europe, while eastbound sees some methanol, MTBE, aromatics and caustic.

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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