SSY Base Oil Shipping Report


It has been painfully slow throughout the United States, Asia and Europe with much of the blame being heaped on the slump in petrochemical prices following the collapse of crude oil prices, which in turn stems from jitters about the economy.

U.S. Gulf of Mexico
There is a clear build-up of tonnage in the U.S. Gulf, yet so little available business that some ships have been idle for a week or more. Others have ballasted away from the region because of the barren cargo landscape.

In the U.S. Gulf to Caribbean market, regular carriers have at least enjoyed a good run of contractual business that has meant they have avoided having too many open positions and freight levels have clung on to previous levels.

The U.S. Gulf to east coast South America is subdued, with the exception of some ethanol voyages that have been booked this week. As a result, there are a couple of ships able to offer completion space at rates of around $80/t for 5,000 ton parcels from Houston to Santos, Brazil. On the whole however, scheduled ships in this direction are mostly full and it looks as though this situation will last a little longer.

Transatlantic eastbound is satisfactory for vessels that are already on berth, but for those that are left in the U.S. Gulf, there are slim pickings. It is said that one ship managed to fix a full cargo of 10,000 tons of benzene from the U.S. Gulf to Antwerp-Rotterdam-Amsterdam, but such fixtures are rare.

The U.S. Gulf to the Far East has been extremely quiet, with hardly any new business quoted. Rates continue to decline, particularly for large lots of 10,000 tons and above, which have slipped into the high $50s/t basis from Houston to the scheduled principal ports in the Far East.

There has been notably less volume quoted in the North Sea and Baltic, although southbound into the Mediterranean remains fairly active with cargoes such as caustic, ETBE, acrylonitrile and some aromatics into the West Mediterranean.

Northbound is not that busy, but freights seem to be holding. Inter-Mediterranean business has been flat and there are some prompt vessels coming open that would suggest rates may come under pressure shortly.

Transatlantic westbound has seen a number of enquiries for pyrolysis gasoline and naphtha, but the levels needed by charterers are considered too low by owners who reject the proposed $30s/t figures in favour of rates that are in the high $30s or low $40s/t for 10,000 ton cargoes.

There has been some interest in shipping base oils to the east coast of South America as well as to West Africa. Europe to the Far East remains slow, with scarcely any trader activity reported. A couple of small parcels of base oils have been fixed, but nothing significant.

Bits and pieces of phenol, glycol and specialised business have been detected, but all the regular carriers, as well as a couple of outsiders, have June space, which means that rates are struggling to stay above $80/t for 5,000 ton cargoes from Antwerp-Rotterdam-Amsterdam to scheduled principal ports in the Far East.

Europe to India and the Middle East Gulf is also quiet, with traders unable to develop business. Exchange rate issues between the Indian rupee and U.S. dollar accentuate the inability to close deals.

There has not been much happening in the domestic Asian markets this week, apart from a round of aromatics tenders northbound from Thailand, as well as some methanol and MTBE in the same direction.

Southbound is restricted to the occasional cargo of caustic, xylene, white spirit and other solvents.

The normally active intra-Far East route has been reduced to a bunch of aromatics possibilities into China, such as paraxylene and toluene, but very little else.

India and the Middle East Gulf have been unexciting, and several ships have spent the week swinging around the anchor with minimal new enquiries noted.

With Iran out of bounds, and petrochemical demand from China falling, it does look a little bleak.

Westbound to Europe offers no real respite, either. Rates are slipping, too – 6,000 tons of benzene from the west coast of India to the U.S. Gulf went for just $87/t for example.

Palm oils are perhaps the most consistent of all the products shipping out of Asia, with rates still in the $30s/t to the west coast of India and $70s to $80s/t for 10,000 to 15,000 ton cargoes from the Malacca Straits to the Mediterranean.

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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