SSY Base Oil Shipping Report


The markets in both Europe and the United States are extremely quiet for this time of year, and there is little to indicate that a year-end rush is about to take place. Asia continues to be active on all fronts.

U.S. Gulf of Mexico
Rates have started to increase on the U.S. Gulf to Far East route, and a 5,000 ton parcel to scheduled principal ports in the Far East would now cost close to $75 per metric ton and perhaps $80/t to China. The rates appear to have moved more because of owners expectations than any great surge in demand.

There have been a scattering of aromatics and ethylene dichloride parcels, but not sufficiently to warrant such large increases in freight. There may still be a rise in demand over the next couple of weeks, which would then swamp available space, but if that extra demand does not materialise then we may see some Christmas gifts being offered by ship owners later in December.

Transatlantic eastbound conversely registered a small decline in freights, especially for larger cargoes. Ethanol and styrene demand has been muted over Thanksgiving, although some experts suggest both commodities could resume shipments to Europe this week. The Houston to Rotterdam round is posting 5,000 ton parcels in the mid to high $40s/t, and there is prompt space available for the first couple of cargoes.

The U.S. Gulf to the East Coast of South America is unchanged, and there are ships with November space. The U.S. Gulf to the Caribbean has been a bit busier, and several prompt cargoes have been unable to secure space.

Demand continues to rollercoaster in the North Sea and Baltic regions through the last few weeks of the year. The list of ships open in prompt positions is fairly lengthy, dragging down freight levels.

Southbound into the Mediterranean is not that active either, and if some flexibility on dates can be adopted, then there should be ample open tonnage for the majority of requirements.

Northbound is fairly featureless. Pyrolysis gasoline, methanol and ETBE dominate, while freight levels are static.

Intra-Mediterranean business is subdued, and several ships have been idle all week. Base Oils, however, have been one of the bright spots, and in spite of most traders and publications saying there is no trade into Turkey, we find the amount of enquiry and fixing to be quite encouraging.

Transatlantic westbound faded late last week because of the long Thanksgiving weekend, but until then there had been some positive signs of benzene, pyrolysis gasoline, caustic, urea ammonia nitrate and sulphuric acid shipments. Benzene shipments are expected to resume this week because of tight supplies in the U.S. Gulf. Rates fell to low $40s/t for 3,000 to 4,000 ton cargoes from Rotterdam to Houston because one or two vessels needed cargoes over Thanksgiving. But if benzene demand does come back, along with other grades such as toluene and paraxylene, then freights may reverse and go back up.

Europe to the Far East has been a bit busier, or at least scheduled tonnage is looking tighter, and so traders with parcels of aromatics are trying to encourage outsiders to berth for end November loading. Rates have been down in the low $80s/t for 5,000 ton cargoes Antwerp-Rotterdam-Amsterdam to scheduled principal ports of the Far East over the past week, but this was more associated to a particular vessels position than a general consensus. Ethylene dichloride, styrene, paraxylene, biodiesel, acrylonitrile, toluene and mixed xylenes have been talked about on this route.

Base oils have only been seen to be looking to ship as far as the Middle East Gulf, India or Pakistan, and mostly from the Mediterranean. One of the more unusual requirements was to export 5,000 to 8,000 tons of base oils from South Africa, either into the Middle East Gulf or to Europe.

Domestic Asian markets remain busy for now. Some experts suggest that buyers tend to hold back the closer we get to the year end as they wish to hold minimal stock, but so far this has yet to happen. Most enquiries now require December loading, and there are a growing number of ships whose first open position is not until January, indicating that some charterers have already fixed well ahead.

Once the forward fixers have been satiated then it will boil down to how much firm demand remains, how much open space there is left and how much bad weather occurs. Bad weather has a way of obscuring true demand, but should it occur now, then it is likely that rates will remain high for the remainder of the month.

Export trades have been busy too. Benzene continues to ship to the United States, along with some base oils. Base oils have also been fixed to Europe, with further enquiries detected. There are also spot fixtures of base oils into the Middle East Gulf. Biodiesel and palm oil demand remain strong in all directions and are one of the main reasons why freights for chemicals and base oils out of Asia are also firm.

The Middle East Gulf to India region enjoyed another busy week.

Westbound space is minimal, and traders who wish to send base oils from India into the Mediterranean will need to be prepared to pay levels of mid $70s/t or more for 5,000 ton parcels.

Eastbound also is lively, especially with methanol, styrene, glycol, aromatics and paraffins. Owners are again quoting rates in the low-mid $40s/t for 5,000 tone parcels from the Middle East Gulf to Singapore, for example.

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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