SSY Base Oil Shipping Report


U.S. markets look tighter this week. European coastal markets are thriving on a mixture of increased demand and bad weather. Asian markets are a bit too quiet to support all the ships open in the region.

U.S. Gulf of Mexico
There has been a rise in the amount of spot and contractual business on the Gulf-to-Caribbean route that has created some serious shortages of space for end February and early March loading. Rates are firmer as a result. A sudden surge in paraxylene shipments to Mexico seems to have accounted for some of the open space, and there have been some further small parcels of base oils, styrene, ethanol and tallow.

U.S. Gulf to the east coast of South America remains tight on prompt space, although some larger ships are looming on the horizon for the first half of March, perhaps lured by some of the larger cargoes of caustic and styrene that have been quoted from the U.S. Gulf.

Transatlantic has had another busy week with prompt styrene and ethanol cargoes hitting the market. Some owners are being very bullish in terms of rate and wanting $70s/ton for 10,000 ton cargoes, but other owners envisage numbers in the very high $50s/t or low $60s/t for just 5,000 ton cargoes from Houston to Rotterdam.

Gulf-to-Far East is perhaps the least active of the U.S. routes, at least in terms of spot business. Contractual volumes however are strong, and that means that there are not so many open positions until mid March. With bunker prices remaining firm, owners are grudgingly lowering rates into the $90s/t for 10,000 ton lots from the U.S. Gulf to principal Far East ports.

Demand for space in the North Sea and Baltic region is good, and ships are well booked. There seems to be a very large amount of biodiesel and ethanol cargoes around at the moment, in addition to the usual chemicals and base oils activity.

The cold weather also has had an impact in terms of delays to vessels and congestion in port.Ice is problematic in the Baltic. It is expected in ports such as Kotka where ice-class 1A is now in force, but Riga too is having issues and even ports like Liepaja require ice-class tonnage.

Southboundinto the Mediterranean has produced another busy week with plenty of cargo. Aromatics, caustic, ACN and biodiesel have been noted, but with Turkey ramping up imports of base oils space is becoming thin. Several chemicals cargoes between 2,000 and 4,000 tons were fixed this week into Turkey in the $90s/t. Northbound continues to experience good demand too, and rates remain firm.

Inter-Med routes are active and only the occasional prompt ship could be found during the week. Vegetable oils ensure the Black Sea and Eastern Mediterranean remain tight, with typical numbers being mid $50s/t for 5,000 ton parcels from the Black Sea to the Western Mediterranean.

Transatlantic westbound is not massively busy, yet the few cargoes of sulphuric acid, caustic, UAN and aromatics that do get fixed demonstrate that rates are still in the mid $40s/t for 5,000 ton parcels from Rotterdam to the U.S. Atlantic Coast. A number of small base oil enquiries are waiting to latch onto any ship that is sailing with part-cargo space to the U.S. Gulf.

Europe-to-Far East has been quiet on the whole. Rates have so far stayed unchanged in the very high $90s/t for 5,000 ton lots from Rotterdam to main Far East ports, and there have been some small parcels of ACN, paraffins, butanol and EDC to help fill those ships that are on berth, but if it quietens further then owners may find themselves hard-pressed to retain these rates.

Europe-to-India looks a bit healthier now that a partial agreement has been reached with regards to phosphoric acid shipments from Morocco to India. Several parcels of base oils have been noted from the Mediterranean to the Red Sea-India-Middle East Gulf, and there is interest in pyrolysis gasoline still as well as some aromatics and acetic acid from the Eastern Mediterranean.

Domestic Asian markets are see-sawing through periods of inaction interspersed with sudden spurts of activity. For a while styrene was in demand with enquiries into China and Hong Kong, and then it was the turn of toluene into China and Taiwan and MX and benzene into Taiwan, but interest has never regained the level at which it was prior to the Chinese lunar holiday.

Export business is not exactly hot either, and there are several carriers open with prompt space to Europe and India-Middle East Gulf. Looking ahead however reveals that there are not so many second-half March positions, and rates that far out seem to have stabilised. Palm oil demand is fairly strong and is probably why there is not as much space as anticipated. And with bunker prices in Singapore costing around $725/t owners are in no hurry to reduce their freight ideas.

The market from India-Middle East Gulf has been reasonably busy. Base oils especially have been active out of Iran into India, with Indian and Pakistani export base oil cargoes also generating some employment for vessels. Rates seem to be steady on this route as well as on the trade lane into Europe.

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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