SSY Base Oil Shipping Report


If anything, trade diminished even further in Europe over the past week, with the exception of the route to Asia. The Americas has stabilized, but activity was sluggish due to the Labor Day holiday, while Asia saw owners trying to hang on to rates in the face of a weak week.

U.S. Gulf
In the U.S. Gulf-to-Caribbean market, there is some prompt space available, after which it is tight until the first half of October, but only a few small parcels were quoted over the last few days, and certainly nothing of any size to allow owners to bring on additional tonnage onto the route.

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U.S. Gulf to the east coast of South America continues to produce ethanol cargoes which have been eagerly snapped up by a couple of smaller ships keen to find a way out from the U.S. Gulf. Rates on all these routes are roughly the same as in previous weeks. Transatlantic eastbound sees some interest in shipping styrene to Europe, and there are still enquiries for ethanol, but demand for space is still far below the amount of space available and rates remain weak.

U.S. Gulf-to-Asia has been steady with rates still quoted in the vicinity of $70 per metric ton for 5,000 ton lots from Houston to Mainport Far East. Styrene and mixed xylenes are the principal grades quoted.

Unfortunately for owners trading within Europe, the end of the month failed to produce the usual rush of last-minute bookings, leaving them with plenty of prompt open ships. This has been very noticeable within the Mediterranean, although perhaps the end of Ramadan can be held partly responsible as there is a lot of business generated through countries such as Turkey and those in North Africa.

Transatlantic westbound has been sluggish, with only the occasional caustic or reformate requirement coming to light. Traders have been checking the possibility to ship benzene or pyrolysis gasoline to the United States, but acknowledge there is the possibility that the pyrolysis gasoline arbitrage at least could turn around so that the material could even move from the U.S. Gulf to Europe instead. Freight rates remain weak throughout with 5,000 ton lots from Rotterdam to Houston barely making mid $30s/t.

Europe-to-Asia, however, has seen a burst of activity across a range of products that has tightened prompt space among the scheduled carriers and permitted a couple of outsiders to capitalize on the tightness. For example, 10,000 tons of ethylene dichloride from Stade in Germany to Thailand paid upper $70s/t for example. Paraxylene, pyrolysis gasoline, butanols, base oils, phenol and acetone have all been booked in addition. There are a couple of ships on berth to India that seem to be struggling to fill their last remaining tanks, and levels in the $70s/t have been heard for 2,000 ton parcels from Rotterdam to the west coast of India.

Even Asia can experience slow weeks, and this was one of them. Again, the Eid festival following the end of Ramadan may be partly to blame. There certainly have been fewer palm oil cargoes from Malaysia and Indonesia over the past week or so. Export business in general from Asia has been slower than normal, with sulfuric acid to the Americas comprising the main product in demand. Even the trade in small parcels to Europe, such as acetic acid, vinyl acetate monomer, acetates and acrylates has dried up for now. Plant shutdowns in Asia and a glut of material already on the water are considered the main reasons. Nonetheless, freight rates remain firm on this service and it is still possible to see triple-digit freights from Korea to Europe for 5,000 ton parcels.

Needless to say, the Middle East Gulf-to-India region was badly affected by the Eid festival and it has not taken long for prompt open tonnage to appear. Owners are attempting to hang on to rates in the upper $70s to low $80s/t for 10,000 ton cargoes from the west coast of India to Europe, but charterers are resisting. It will become clearer as the week progresses as to which direction freights will take.

Eastbound space is beginning to pile up too, and numbers are weaker in this direction as well. Regional trades have been hit hard and small lots from the Middle East Gulf to the west coast of India are now seeing levels in the upper $40s/t for 1,500 to 2,000 ton parcels rather than the $60s and $70s/t that were done only a month or so ago.

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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