SSY Base Oil Shipping Report


The Americas look muted with a lot of ships seemingly immobile for days on end. Europe is a bit sparkier with some useful domestic business and some deep-sea fixing to help shift tonnage. Asia has also seen worse periods than this and vessels are getting fixed.

U.S. Gulf of Mexico
Some trade lanes out of the U.S. Gulf are truly barren and ships that get stuck there can wait days or even weeks before securing some kind of outbound cargo. U.S. Gulf to the Caribbean is one of those routes now, and it is common to see the same ships quoted in the same open position. Rates are naturally weak in such an environment.

Transatlantic eastbound is another route on which nothing much is happening. Interest in styrene and ethanol to Europe waned, leaving just bits and pieces for the scheduled carriers to mop up. Rates are now in the upper $40s per ton for 5,000 ton cargoes from Houston to Rotterdam.

U.S. Gulf to India is not that active, but there have been some vegetable oil possibilities that could open up some additional space in August. Base oil lots of 10,000 tons for Port Arthur to Mumbai were heard to have fixed at $80/t, which seems in line with the market.

The U.S. Gulf to Far East is starting to see some smaller parcels in the 5,000 ton category, but owners bemoan the lack of larger cargoes to allow them to fill their ships and allow them to ask for higher freights for the smaller lots. As it is, a number of 5,000 to fixtures of styrene, aromatics and glycols have been noted, but most are paying $52 to 58/t, depending upon loading and discharge ports.

Only the U.S. Gulf to the east coast of South America is experiencing a degree of tightness in space, allowing scheduled owners to claw back some freight increases. Parcels of 5,000 tons for Houston to Santos tend to fetch mid-high $70s/t these days. Contractual business is doing very well on this service, which means that scheduled space is tight and is expected to stay tight well into August. Ethanol demand to Brazil has subsided too, which eliminates the chance of outsiders coming on berth and offering any remaining completion space.

The North and Baltic seas have been busier and the majority of prompt ships have managed to jump ahead by a week or so. Contractual volumes account for a large part of the movements, however, rather than any real resurgence in spot trade.

On southbound routes into the Mediterranean, rates have come up a bit, with some fixtures seeing an extra $1.00 to 2.00/t compared to previous shipments.

Northbound is nothing extraordinary, however, while the cross Mediterranean market is generally balanced between supply and demand. The number of base oil shipments into Turkey has jumped again, with cargoes flooding in from Mediterranean and Black Sea.

Transatlantic westbound is also a bit more active, thanks chiefly to aromatics arbitrage that have opened. Cargoes such as pyrolysis gasoline, benzene and toluene have been fixed over the past week. Rates are still low to mid $40s/t in general, though July space is getting a bit tight as some of the scheduled carriers are having difficulty in repositioning ships back to Europe from the U.S. Gulf of Mexico. Some owners are talking about freights in the $50s/t for 4,000 to 5,000 ton cargoes from Rotterdam to Houston, but nothing like this has been fixed so far.

Europe to the Far East is at last a bit more active and space is gradually filling. Typical commodities are aromatics, butanols, acrylonitrile, pyrolysis gasoline, and even some styrene. There are also attempts to move base oil from the Mediterranean, with possibly one or two such cargoes fixed from the Black Sea.

Europe to India to the Middle East Gulf has been quiet on chemicals, and as a result some of the usual carriers have reduced the amount of tonnage they are sending this month. There are, in addition, a couple of outsiders around that need to relocate to the region to take up period business. Rates have therefore slipped slightly, but are still in effect in the low $70s/t for 5,000 ton parcels for Rotterdam to Mumbai.

China continues to import volumes of paraxylene, mixed xyleen, toluene and glycols, albeit not in sufficient volume to allow owners to really exert any upwards pressure on rates.

The Domestic Asian market therefore looks somewhat steady, if not too adventurous. There is some base oil traffic within the region, typically within South East Asia, but there have also been shipments southbound. For instance, 2,000 tons of base oil fixed for Ulsan to Singapore, are reportedly at $40/t.

Asian Export trades are equally steady. There are the usual big cargoes of palm oil and biodiesel to Europe for instance, the rates for which have seen moderate decreases as the cost of bunkers has gone down. Some large cargoes of benzene are under discussion to the U.S. Gulf of Mexico for August, while cargoes of sulphuric acid are moved into South America.

In keeping with the overall softer tone to the market, rates for 5,000 ton parcels for Korea to Rotterdam are assessed as costing low $90s/t.

India and the Middle East Gulf are struggling to cope with the number of ships open in the region and rates are weak, particularly to Europe. A number of spot opportunities have presented themselves eastbound, but there is talk of plant issues that might restrict some of the demand.

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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