SSY Base Oil Shipping Report


Markets out of the U.S. are not very exciting, but nor is there an over tonnage situation as there is in Europe, that is keeping freight rates depressed there. Asia saw a slight improvement in activity levels over the past week, although there is still open space available in April.

U.S. Gulf of Mexico
It has been a week of mixed results in the U.S. The main U.S. Gulf-to-Far East route is flagging, and rates have edged down slightly as it has become apparent that several vessels still have space remaining in April, while the supply of cargoes is meagre. Some styrene has been booked, and there is talk of ethanol to the Philippines as well as a bit of paraxylene. It has also emerged that a further 8,000 tons of base oils are loading in the U.S. Gulf for Singapore.

Transatlantic eastbound had a quiet week. Styrene demand tapered off, and with the only ethanol quoted being sourced from the Caribbean, there have only been small scraps of petroleum chemicals and biodiesel left. Nonetheless, contractual demand is clearly running well, and most scheduled ships are booked through until May.

Business to the east coast of South America is steady. Demand is reasonable, with enquiries for aromatics, styrene, caustic and urea ammonia nitrate, while space is fairly tight for the balance of April.

U.S. Gulf-to-Caribbean has enjoyed a little more activity, and since there is not a great deal of open space, owners have been fixing small cargoes of clean petroleum products for numbers that are around 10 percent higher than previous fixtures. Smaller parcels too have been attracting firm rates, and in one instance 2,000 tons of acetone was booked from the U.S. Gulf to the east coast of Mexico for an astonishing $82/t.

Unfortunately for ship owners whose vessels ply the North Sea trades, the market has remained very slow, and there have not been many opportunities for them to fix their vessels further ahead than a week or so. As a result, there are plenty of prompt positions and freight levels are therefore kept highly competitive. The Baltic has not been affected to the same extent, and there have been cargoes of base oils, benzene/toluene/xylene, FAME and acrylonitrile quoted.

Southbound into the Mediterranean is quite strong, and owners are bullish on their freight ideas. Demand is high for all manner of chemicals, base oils and biodiesel. Northbound is reasonably busy too, but there is probably adequate open space for most requirements.

Inter-Mediterranean markets have been very slow, and owners have been having all kinds of problems to occupy their ships. In many cases, they have had to resort to bulk cargoes of urea ammonia nitrate, acid, caustic or vegetable oils as a way to fill their ships. The rates for these are unattractive, but the owners do ensure a full ship. The alternative is to attempt to parcel up, but this is a bit hit or miss in the Mediterranean these days, and may help explain why owners are offering high rates for smaller parcels. It is simply that they have no other completion cargo and so all the costs are borne by the small parcel in question.

Transatlantic westbound is burdened with too many ships, either already on berth or looking to come on berth, so even though there is a reasonable level of enquiry, rates have gone down. For example, 9,000 tons of pyrolysis gasoline was heard to have fixed from Antwerp-Rotterdam-Amsterdam to the U.S. Gulf in the mid $40s/t, which is a drop from the mid-to-high $40s/t of last week. Further enquiries of pyrolysis gasoline have been noted, along with enquiries for caustic, paraxylene and urea ammonia nitrate. A small parcel of base oils is looking to ship to Colombia.

Europe-to-Far East is not particularly busy, but scheduled space is thinning out until later in May. However, with all the potential outsiders available, rates have subsided slightly, with a typical 5,000 ton cargo from Rotterdam to Korea fetching low $90s/t these days. Some base oils have been quoted to Singapore from the Mediterranean. There are also base oils being worked from the Black Sea into India and U.A.E., probably because Iranian material has become less competitive.

Whilst still relatively subdued, domestic Asia markets have seen more enquiry over the past week which has accounted for many, but not all of the remaining April ships. With April now effectively taken care of, both owners and charterers have moved on to quoting May positions and cargoes instead.

Since the arbitrages for aromatics are closed, the Asia export market has focused more on larger lots of caustic, as well as biodiesel and palm oils. Rates are steady for the small parcels from northeast Asia back to Europe, whereas rates for palm oils on the long-haul routes have gone up slightly. Cargoes of 18,000 tons from the Malacca Straits to the Black Sea have been booked in the low $80s/t, while 15,000 ton shipments into North China have been fetching low $40s/t.

Business has picked up quite a lot in the Middle East Gulf-India region, and space looks tighter for the rest of the month. Eastbound in particular is seeing more aromatics, styrene, paraffins, ethanol, methanol and MTBE quoted, mainly in the 5,000 to 10,000 ton size, and rates are starting to lift. Westbound is also fairly tight on space, although rates have not altered much.

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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