SSY Base Oil Shipping Report


The lunar holiday effectively slowed most of the business in the Asian market causing some incidental impact on European and U.S markets, but other regions had a reasonably busy week.

U.S. Gulf of Mexico
There has been sustained interest in vessel space from the U. S Gulf to the Far East, typically with cargoes such as styrene, aromatics, phenol, acetone, acrylonitrile and glycols. However, very few new deals could be processed due to the holidays in Asia, but it demonstrates the depth of potential demand.

Freight ideas from owners are well over $100 per metric ton for 10,000 ton cargoes, and prices will be tested when the market returns to normal next week. A bit of space opened on the U.S. Gulf to India route. Owners have been willing to accept rates in the upper $90s/t for 3,000 ton parcels from Houston to west coast India. The route from the U.S.Gulf to Brazil andArgentina continues to enjoy healthy demand. Scheduled space is seldom available, and outsiders are looking for numbers around $70/t for 10,000 ton cargoes from Houston to Santos. Ethanol is again a major product on this trade lane, and there have been cargoes of styrene, caustic, base oils and clean petroleum.

On the U.S. Gulf to the Caribbean service there is some prompt space available for larger cargoes, but owners are bullish on freight ideas, especially for smaller parcels. Transatlantic eastbound rates are slightly softer. Several 5,000 ton parcels of styrene were booked from Houston to Rotterdam in the very high $50s/t for late February. A handful of ethanol possibilities have been seen and are expected to attract similar freight offers.

All of the coastal routes within Europe succeeded in producing useful volumes of cargo. There is a shortage of prompt space in many areas, especially in the Baltic and the west Mediterranean. Cargoes from Antwerp-Rotterdam-Amsterdam into the Mediterranean have also been finding it hard to locate suitable vessels at a freight level that suits both parties. Demand is diverse and includes base oils, caustic, benzene, paraxylene FAME, ETBE, styrene and acrylonitrile.

Northbound demand is fairly upbeat with cargoes such as pyrolysis gasoline from the Black Sea, Italy, France and Spain. FAME has been busy from Italy and Spain to Northwest Europe. Base oils to Turkey and Egypt are more common these days, and rates are often quoted well into the $50s and $60s/t for small parcels from the western Mediterranean. Transatlantic westbound is steady, but not sensational. The same kind of freight levels are under discussion as last week, with much the same kind of cargo composition as last week -caustic, sulphuric acid, base oils and toluene.

There has been more interest from ship owners interested in taking cargoes from Europe to the Far East. The problem is that there are very few workable large cargoes that could be considered a base cargo on top of which an owner would then have to fill with parcels. Consequently, freight numbers are unchanged, with owners tending to quote rates in the $120 to 130s/t for 3,000 to 5,000 ton parcels. However, if a ship does go on berth, these levels could be reduced to as low as $100s/t or even into the $90s/t.

The picture in Europe to India and the Middle East Gulf is clouded by the number of stainless ships that would normally take phosphorous acid. Until both Mediterranean sellers and Indian buyers are happy with the price of the commodity there will be no phosphoric acid shipped, leaving a number of vessels to scrabble around trying to find alternative business. So far, the levels for base oil cargoes in this direction have not changed, with numbers in the upper $80s and low $90s/t reported for Mediterranean cargoes. However, vegetable oil rates from the Black Sea to India are already weakening and this may infect base oil freights shortly.

As expected, the shipping market within Asia ground to a halt because of the Chinese New Year celebrations. Before the holidays, there were a number of domestic Asian cargoes noted, especially within Southeast Asia, where some benzene plants have been down for maintenance. This has necessitated cargoes to be shipped from places like Kerteh and Maptaphut instead, and at fairly high freight levels – 9,000 tons fixed Map Ta Phut to Singapore for example around $20/t.

Asian export demand has been slow, with the exception of sulphuric acid. Palm oil freights have been under attack from the growing number of ships scheduled into Asia, and the latest figures show rates in the mid $70s/t for 15,000 ton cargoes from the Malacca Straits to the Black Sea, a drop of some $10/t from the previous month.

Rates for palm oil cargoes to India seem impervious to the extra pressure, at least so far. Trade westbound from the Middle East Gulf and India is steady. Several ships have gone on berth to the Mediterranean and Northwest Europe, successfully parcelling up with small cargoes in the 2,000 to 3,000 ton bracket from India and Pakistan that pay $125 to135/t. Eastbound however is a bit flat and rates are 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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