SSY Base Oil Shipping Report


It is a tight picture in the U.S. Gulf of Mexico for February loading. Europe is enjoying a strong performance in the local market, but not much is happening deep-sea. Asia is quiet on both coastal and long-haul routes.

U.S. Gulf of Mexico
The fact that there are few imports into the United States is perhaps the main reason why freights have not gone down on export cargoes. Essentially, the pool of open tonnage grows a little but then recedes as ships are fixed away, maintaining a steady balance. Much the same as freight rates have done over the past week.

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Some would argue that transatlantic eastbound numbers have risen slightly, but there is not much being fixed that can be used to demonstrate a trend. Styrene and ethanol are certainly hot items eastbound to Europe, and there is talk that 10,000 tons styrene from the U.S.Gulf to Antwerp-Rotterdam-Amsterdam paid in the low $60s per metric ton, fanning the flames. However, a number of ships on berth this month will likely act as a brake on any freight increases.

U.S. Gulf to the Caribbeanactivity perked up a bit this week keeping tonnage tight and rates strong, helped by fog in the U.S Gulf. Most scheduled carriers on the U.S. Gulf to the East Coast of South America service are full for February, and there is demand for ethanol, styrene, caustic and base oils. Freights are pretty much in line with previous weeks, however. U.S. Gulf to the Far East is unchanged in terms of freight rates. There has not been much reportedly fixed, but when the details of a deal do emerge they are invariably at rates of $110/t or more.

The past week has been a very busy one for ships trading around the North Sea and Baltic. Both contractual and spot demand is strong and the clean petroleum market had a busier week. Plummeting temperatures and growing ice fields in the Baltic mean fewer candidates chasing cargoes, although this is one area where owners seem content not to challenge rates, at least for now.

In NorthwestEurope there have been solid increases, whether by a minor 4 to 5 percent or by a whopping 30 percent. The markets into the Mediterranean, out of the Mediterranean, and within the Mediterranean also are reported to be exceptionally strong. Four thousand ton biodiesel from Northwest Europe to the French Mediterranean fetched over 50/t for example, compared to the regular low 30s/t rate. A two-day voyage of shipping base oils within the Western Mediterranean collected over $100,000 when a normal level may be around $60,000. These increases have been repeated throughout the region.

Deep-sea demand has been lethargic. There has been some open space from Europe to the Far East and rates have reducedaround $5.00/t and levels in the $90s/t are again being seen. Demand has not improved substantially over the past couple of days. Although there are a few more enquiries for base oils, the list of ships showing February and March space is a long one, which may bring further pressure to bear.

Transatlantic westbound rates are unchanged, but there are more opportunities for ships to go on berth, such as sulphuric acid, caustic, naphtha, and even some smaller lots of base oil. These latest requirements will probably ensure rates remain stable.

There is still a large amount of open space on the majority of domestic Asian routes which is keeping downward pressure on local rates. The busiest of all coastal routes has been the intraFar East trade. Cargoes are mostly aromatics, styrene, caustic and glycols, but there have been some base oils interspersed among them.

Base oil requirements have also cropped up northbound, mostly from Southeast Asia into China, and there have been some possibilities to ship small parcels of base oils within Southeast Asia. There have been several orders circulated to take base oils from Northeast Asia into the Middle East Gulf, while four of five cargoes have been quoted from India and the Middle East Gulf back to Singapore, Southeast Asia and China.

Generally, Asian export business has been slow, and the list of ships looking to find cargoes back to Europe or the U.S. is getting longer. All the same, there is no panic for now and typical rates in the $90s/t are quoted for 4 to 5,000 ton parcels from Korea to Rotterdam for example. Eastboundmarkets out of India and the Middle East Gulf are reported to be encountering larger cargoes such as methanol and MTBE, which is helping rates stabilise. Westbound is patchy, with several ships needing to fill, while demand flicks back and forth between methanol, caustic, aromatics, sulphuric acid and ethanol. There have even been further attempts to ship base oils from the Red Sea into the 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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