SSY Base Oil Shipping Report


Asian spot markets are not exactly thriving, but they are several steps ahead of Europe, whereas the U.S. lags a long way behind both. Fortunately for owners, contractual demand is reasonably solid everywhere, so freight levels are mostly unaltered.

U.S. Gulf of Mexico

It is hard to fathom out why the U.S. shipping market is in such doldrums, but effectively it boils down to uncompetitive product pricing, coupled with weak demand outside of the U.S. Those two factors are probably the main reasons why we are seeing so little being shipped out of the U.S.

Petrochemical markets have many drivers, and with such an array of commodities, it is rare that so few are in demand, but this does seem to be what is happening. In a great many products, the spot market price is either flat worldwide, or if it does change it changes almost instantaneously in other regions as well so as to rule out any kind of seaborne trade.

Contractual demand however is reasonably solid, at least on routes such as transatlantic eastbound. So while there is not a great deal of spot demand, apart from styrene, glycols, urea ammonia nitrate and some grades of aromatics, freight rates are not really going down. In some instances, we have seen higher freights too simply because there is not a great amount of tonnage on berth. Of course, there are some ships that still have completion space, and when that occurs it is possible to obtain freights in the $40/t to $42/t region for 5,000 ton parcels from Houston to Rotterdam. Otherwise, freight levels tend to be closer to mid $40s/t.

U.S. Gulf to the east coast of South America is in a similar situation. Demand is mainly routine and spot freights are hovering in the region of mid $60s/t for 5,000 ton parcels from Houston to Santos.

U.S. Gulf to Far East is certainly the weakest of all routes, and there seem to be few arbitrage opportunities. A 10,000 ton parcel of paraxylene was quoted from the Gulf to China, and it has been suggested the cargo will be fixed in the high $40s or low $50s/t. Only small parcels of acrylonitrile and phenol are quoted otherwise.


The North Sea and Baltic have looked tired for the past couple of weeks, and there has been a considerable amount of open tonnage during this time. Freight rates have been very competitive for most requirements.

Southbound into the Mediterranean has not been as bad, although there are reports of one or two ships heading back into the Med without being completely full. Base oils have been noticeable on the route, as well as styrene, methanol, caustic, MTBE, aromatics and FAME. Freight levels are holding and it is common to see $45/t to $50/t for 4,000 to 5,000 ton parcels to the west coast of Italy for example.

Northbound is not that active, and space can be readily found. Rates for 4,000 to 5,000 ton parcels from the west coast of Italy to Antwerp-Rotterdam-Amsterdam are comparable as southbound numbers.

Inter-Mediterranean markets have been fortunate to see a lot of biodiesel activity, which has occupied a large proportion of prompt space. More MTBE and ETBE have been detected, suggesting gasoline demand is getting into its stride. Rather more acid, both phosphoric and sulphuric, has been noted, and there is a steady demand in caustic, methanol and aromatics. Base oils have been present, but nothing too special, although 3,000 tons were heard to have fixed from Italy to North Africa for a rather high level of $200,000.

Transatlantic westbound has been a touch firmer with a relative shortage of prompt vessels on berth. 10,000 ton parcels from Rotterdam to Houston are pushing into low $40s/t instead of mid-to-high $30s/t for example, while smaller parcels are seeing even stronger increases. 2,500 tons of base oils were heard to have fixed in the low $70s/t for example. Benzene, paraxylene, pyrolosis gasoline and urea ammonia nitrate are among the more obvious requirements this week.

Med/States is also fairly strong, with 5,000 tons of aromatics fixed from southern Spain to Houston in the mid $70s/t.

Europe to Far East has been horribly quiet again, and apart from some small specialist grades quoted there has not been a great deal around. Rates are notional, but there is certainly open space from both the Continent and the Med that a firm 5,000 ton requirement could see freights penetrate the $80/t barrier for example. Europe to India and the Middle East Gulf is generally stable, although the vegetable oil season out of the Black Sea is gradually winding up, and owners may have fewer alternatives to use to take them back into the Middle East Gulf-India region.


There has been a steady flow of cargo on the domestic Asia markets to the extent that the majority of ships have managed to fix through into the first week of July. Rates are reported not to have changed at all, although southbound is looking pretty tight on space for first half July. Northbound however is not so active, and 9,000 tons of base oils from Singapore to Matsuyama were heard to have gone in the low $30s/t. There is still trader interest in moving base oils from Southeast Asia to China too.

Asia export markets are fairly firm too. Base oils are noted looking to ship to the U.S. and even seemingly to Canada. Base oils are looking to move to Europe too, but are primarily in-house cargoes. Aside from that, there are numerous small parcels of acrylates and acetates to Europe, the rates for which are in the $140/t to $150/t region for 3,000 to 4,000 tons from China, and around $105/t to $110/t from Singapore. July space is fairly limited, hence the somewhat firm freight ideas.

Benzene, biodiesel and methanol cargoes have been spotted looking to ship to Europe, and while there is little benzene to the U.S. there has been some methanol fixed. Palm oil markets are reasonably busy, but again, freight levels are steady, whether to India or into Europe or U.S.

The Middle East Gulf-India region is actually quite busy, and there is a scarcity of prompt space in all directions. Freight ideas from charterers have increased, but to little avail due to the basic lack of space.

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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