SSY Base Oil Shipping Report


U.S. markets are mostly flat, apart from the route into Asia that has at last come alive. Europe is still too quiet for the time of year, while Asian markets are doing well with plenty of cargoes obtainable.

U.S. Gulf of Mexico
Things have been coming together on the U.S. Gulf to Far East run, and while freight levels have not surged as owners were hoping, the amount of open space in December is steadily diminishing. If demand continues at this pace, and there are a number of cargoes out there in excess of 10,000 tons, including paraxylene, ethylene dichloride, styrene, acetone, biodiesel, glycols and vegetable oil, then the next week or so will see the remaining ships fill out and charterers will have to entice a new set of owners onto the berth. Currently, 5,000 ton parcels from Houston to scheduled principal ports in the Far East fetch mid $70s/t, but this could conceivably rise.

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Transatlantic eastbound has been disappointing for owners. Bits of styrene get talked about, but nothing seems to become workable. Ethanol too saw a bit of interest, but the cargoes never made it to the fixing stage. Rates may weaken if this situation does not change. Demand for space on the U.S. Gulf to East Coast South America route is slow. Several scheduled ships are still not completely full, and rates being discussed for 5,000 ton parcels from Houston to Santos, Brazil, are in the region of $60/t.

U.S. Gulf to the Caribbean had a busier week, and there is not much prompt space remaining. Again, smaller lots of clean petroleum have taken care of the ships that were open in the area.

Prospects for a year-end rush are beginning to fade in the North Sea and Baltic. Demand is steady, but contractual volumes are still lower than usual and consequently many ships are able to offer prompt space.

Rates need to be competitive in this kind of environment. Southbound into the Mediterranean is stable and tonnage supply well matched with demand. Rates are running at unchanged levels. Northbound is uninspiring, and there is ample space available to take care of most requirements.

On inter-Mediterranean trades, some owners have succeeded in occupying their vessels until late in December, but such owners are in the minority as there are plenty who still have prompt open vessels. Bad weather delays are just beginning to affect fleet scheduling in the Mediterranean, and while owners will not make money out of the delays, it does mean that voyages can take longer and so occupy more of the fleets time. Theoretically, it should therefore reduce the amount of competition per cargo, but if demand declines as seems to be the case, then rates just spiral lower.

Transatlantic westbound has been a bit more active. Cargoes of benzene and pyrolysis gasoline have popped up, as well as shipments of caustic, paraxylene, sulphuric acid and urea ammonia nitrate. Freight levels are steady in the low $40s/t for 5,000 to 6,000 ton cargoes from Rotterdam to the U.S. Gulf, but space is becoming tighter for December. Any additional demand could push up freights before year end.

Europe to the Far East looks like it will go to the wire too. Scheduled tonnage is almost full for December, but at the same time demand has not yet produced sufficiently large enquiries to warrant an outsider going on berth.

Europe to India and the Middle East Gulf region is stable. There are some base oils quoted, along with parcels of ethylene dichloride, toluene, mixed xylenes, pyrolysis gasoline, acrylonitrile and styrene, as well as the main staples of phosphoric acid and vegetable oil. Numbers tend to be in the mid $70s/t for 5,000 ton lots from Rotterdam to the West Coast of India.

If anything, demand has surged towards year end in the Domestic Asia market rather than go off the boil as some experts had predicted. There are all sorts of aromatics to be shipped intra-Far East, as well as methanol, caustic, glycols and styrene. The region is also beginning to see delays caused by bad weather in some of the Korean and Chinese ports.

With fewer ships becoming open in South East Asia, it does mean that northbound trades are very tight on December space. Rates for 3,000 ton parcels from Ulsan, Korea, to Singapore are said to be in the mid $30s/t, whereas 3,000 ton parcels from Singapore to Ulsan range from $45-47/t.

Further pressure on space has been brought to bear by the vibrant palm oil market in which ships are still in great demand for cargoes to China, India and Europe.

Asia Export business appears stable. Biodiesel and renewable diesel cargoes are much in evidence, and with fewer ships ending up in Asia there seems to be difficulty in covering certain chemicals parcels back to Europe.

The India and Middle East region remains active and December space is scarce.

Eastbound sees firmer freight ideas from owners, which is backed by heavy demand for methanol, MTBE, glycols and ethanol. Parcels of 5,000 tons from the Middle East to Singapore are heading towards a $50/t rate, up from the low $40s/t of just a few weeks ago.

Westbound space is tight also and owners are looking for rates in the mid $70s/t for 5,000 ton lots from the Middle East to the Eastern Mediterranean. Some base oils are being attempted from India into the Eastern 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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