SSY Base Oil Shipping Report


Activity in the United States came to an abrupt stop with the arrival of Hurricane Isaac. European markets have been steady but uninspiring and Asia continues to be active with prompt space reported to be scarce on several trade lanes.

U.S. Gulf of Mexico:
Just a week or so ago, the U.S. market was slowly hauling itself out of the mire, with vessels starting to be fixed away and a bit more business coming to light. Then Hurricane Isaac struck, followed in quick succession by the Labor Day long weekend, and with that everything just went quiet.

It is still a bit too early to say how things look right now, as there was clearly damage caused to some facilities on the Mississippi River, and a number of plants went into precautionary shutdown. There are reports of cargo cancellations, which as a result could see prompt vessel space open up and possibly some attractive freights may be obtainable as a way of mitigation, but details will filter out over the next day or two.

Earlier, the U.S. Gulf to Caribbeanroute was facing stiff freight ideas from owners, but with open tonnage still around in the U.S. Gulf, these ideas may become more moderate. Rates on the U.S. Gulf to the East Coast of South America run had dropped away considerably, and since there are still ships showing part-space available, it is felt that some attractive rates may be achievable.

For example, 10,000 ton parcels of heavy aromatics were booked for Houston to Santos, Sao Paulo, Brazil, for $46 per metric ton, and 6,000 to 7,000 ton parcels of caustic were claimed to be seeing rates in the low $50s/t on the same route.

Transatlantic eastbound had recorded several fixtures of styrene, all at around $50/t for 5,000 ton parcels, but with some of these loading from the Mississippi, there may be doubts as to whether they will be shipped after all.

The U.S. Gulf to the Mediterranean is tight on space through September, and there may be sufficient cargo to warrant bringing an outsider on berth.

U.S. Gulf to the Far East had been seeing some interest in 10,000 ton cargoes of aromatics such as paraxylene and mixed xylenes, but these seem to have disappeared for the time being. Space had been tightening and owners had been looking to achieve an extra $5/t or so, which would lift the typical rate for a 5,000 ton parcel for Houston to scheduled principal ports in the Far East to $60/t.

The U.S. Gulf to India and the Middle East Gulfsees space available through September spread across several ships, but owners remain bullish on freight ideas, at least until the last possible moment.

It has been rather slow in the North and Baltic seas, with even contractual business running at lower levels, caused it would appear by several plants undergoing routine maintenance at the moment.

Southbound into the Mediterranean is strong and there are plenty of cargoes quoted, including base oils. Northbound on the other hand is slow, with much fewer cargo opportunities noted.

Intra-Mediterranean business is a bit mixed. There are a lot of cargoes quoted to load out of the Western Mediterranean, typically MTBE, fatty acid methyl ester, base oils, benzene and styrene. The Eastern Mediterranean is still dull, and there are various prompt open positions.

Transatlantic westbound traffic is not very exciting. Sulphuric acid and urea ammonia nitrate provide the big bulk cargoes on this route, with the occasional parcel of base oil or paraxylene cropping up.

From Runcorn to the U.S. Atlantic Coast, 8,000 ton caustic was heard fixed in the high $50s/t, which is roughly in line with earlier similar fixtures.

Europe to the Far East is a bit quiet right now, but since there is not much September space remaining, it does mean that rates are static. For October lifting, if there is firm business to be done we believe that a 5,000 ton cargo from Rotterdam to the principal ports in the Far East can secure levels in the low $80s/t. Europe to India and Middle East Gulf has seen a surge in demand for phosphoric acid, which means that ships with stainless steel tanks have been in great demand. There have also been a string of base oils fixed from the Black Sea to India with several further cargoes enquiring for September loading.

It has been reasonably busy again in the Domestic Asian market. On the intra-Far East route there have been numerous cargoes of benzene/toluene/xylene and styrene, chiefly into China and Taiwan.

Southbound also has plenty of cargo opportunities, and tonnage is looking tight until after mid September.

Northbound has proven to be tight at times, especially from Thailand when aromatics traders have required prompt ships. Intra-South East Asia is also short on space until mid-second half September.

Palm oil business has been brisk again, with rates a bit firmer into the East Coast of India, in particular, with even 20,000 ton cargoes securing rates in the low to mid $30s/t.

Export activity from Asia is active too. There are all sorts of aromatics and solvents looking to move into India and the Middle East Gulf, while further afield there has been good demand from the palm oil sector as well as biodiesel, sulphuric acid, thermal phosphoric acid, waxes, styrene, cyclohexane, acetic acid and to wrap it all up a couple of cargoes of base oil to North West Europe. The Middle East Gulf to India market looks balanced westbound, with only pockets of space remaining. Some base oils were noted fixing West Coast India to Turkey and Italy.

Eastbound is principally steady, although there are several ships with prompt space which means rates remain soft.

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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