SSY Base Oil Shipping Report


Both the U.S. and European markets have been really slow for the past two weeks with an excess of tonnage and declining freight rates very much in evidence. Asia is not looking so bad in comparison, although there are still some prompt gaps to fill.

U.S. Gulf

The past week has seen rather more demand appear on the U.S. Gulf-to-Asia route, which is gladly received by those ship owners whose vessels still have a lot of open space remaining this month. The extra demand is with products such as paraxylene, styrene and ethylene dichloride, but such is the overhang of tonnage that the freight levels have bombed completely.

Rates for 5,000 ton parcels range from $55 to $60/t, which is a substantial decrease from the $100/t that was being achieved at the beginning of the year. Some owners have little faith in a revival and have decided to abandon their scheduled sailings for June altogether. Others still have a lot of space remaining, which suggests freights will remain competitive for at least a further week.

Elsewhere from the U.S. Gulf, there has really been very little occurring. Some ethanol has begun to ship down to Brazil from the U.S. Gulf, but otherwise this route into east coast South America is mainly concerned with contractual business. U.S. Gulf-to-Caribbean is slow with space readily available. Transatlantic eastbound is also slack, with styrene being re-directed to Asia. There is ample space, and 5,000 ton parcels from Houston to Rotterdam are notionally marked as $40-$41/t.


Ship owners have found it very difficult to trade their ships in the North Sea and Baltic routes, and a large number still have prompt positions that need to be covered. The situation could be worse were it not for the decision of some owners to commence their annual dry docking programs, which have kept at least a few more vessels off the open market.

Base oil activity is thin, outside of the main refiners schedules. Heading southbound into the Mediterranean has not yielded much base oil activity either. Instead, cargoes are mainly products such as styrene, ethanol, benzene, ethylene dichloride and fatty acid methyl ester. Moreover, there have been a number of larger vessels all vying for business into the Mediterranean which has caused freights to sag on some routes. For example, 2,500-3,000 ton parcels of easy products from Antwerp-Rotterdam-Amsterdam to west coast Italy are paying mid-high $40s/t. Similar numbers have been reported on larger cargoes of around 5,000-6,000 tons to Turkey.

Northbound from the Mediterranean is steady. In the Mediterranean, there are quite a large number of inter-Mediterranean requirements, but a surplus of space has meant freight rates remain highly competitive. Again, base oils have not really featured highly. Transatlantic westbound is rather slow, and only paraxylene shipments are common. Freights out of Rotterdam are typically around $40-$41/t for 5,000 ton parcels whereas from the Mediterranean there have been several cargoes fixed at strong rates, such as 4,000 tons of base oils from Augusta to Houston that returned $100/t.

Meanwhile, 7,000 tons of paraxylene from west coast Italy to the U.S. Atlantic Coast fetched $85/t, and 10,500 tons of base oils from Livorno to Punta Cardon made low $60s/t, although there is a suggestion that the ship may be picking up a small parcel of additional base oils in Leixoes to fill up the vessel.

Europe-to-Far East is dull, and there are a number of open positions with space. Rates have collapsed from the $100-$105/t region of just a couple of months ago to mid $80s/t, and even that figure could be put under pressure unless more demand is forthcoming. For example, 10,000 tons of paraxylene from Aliaga to Southeast Asia is understood to have gone in the $70s/t. Europe to India-Middle East Gulf presents an unchanged picture with pretty much the same mix of parcels and commodities as reported last time.


The domestic Asia market does not feel particularly active, and indeed there are quite a large number of ships without employment in the second half of June, but it does appear that contractual demand has picked up and has assisted in filling the first half June positions. Styrene demand is looking healthier, but aromatics and methanol are calm.

Base oils have been represented with cargoes moving out of Southeast Asia, both locally and further north, while Korean exports have been noted within Northeast Asia. On the Asia export market, base oils have been spotted looking to ship to the U.S. Gulf from Korea, but it is unclear yet whether this is grade-specific or in response to higher U.S. posted prices. Rates for 5,000 tons of base oils from Korea to Houston should be in the vicinity of mid-high $60s/t currently. Space to Europe however is harder to find, and the same parcel would probably fetch $105-$110/t to Rotterdam.

Asia to India-Middle East Gulf is a bit calmer too, and there are owners interested in fixing 5,000 tons of easy chems from Korea to west coast India in the low $50s/t. Business in and around the Middle East Gulf-India region however has picked up, and space is fairly tight westbound. Iranian chemicals are becoming more frequent in this direction, and have also been noted more regularly on the eastbound route.

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 Panos Giannoulis can be reached at or +44 20 7977 7538 and in Singapore Jordi Maymi at +65 6854 7127.

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