SSY Base Oil Shipping Report


It has been another encouraging week in the U.S. market with improved volumes recorded on several key routes. Asian markets are running smoothly, whereas Europe had a much quieter week overall.

U.S. Gulf

Falling commodity prices in the U.S. finally allowed the arbitrage to open wide enough for traders to shift a substantial amount of cargo from the U.S. Gulf to Asia over the past week. Paraxylene and mixed xylenes are perhaps the most active products, but there have been fixtures of styrene, phenol, acrylonitrile, ethanol, glycols and vegetable oil. Space has become a lot tighter for loading during the end of August and into early September and owners have started to raise their freight ideas. Most of this latest round of fixing has been in the $40s and $50s per metric ton, but some owners are already thinking that it should be the year-end rush and have ambitiously put mid $70s/t on 5,000 ton parcels to China.

U.S. Gulf-to-India-Middle East Gulf is also busier. One shipment — 30,000 tons of ethanol — was fixed into India and Middle East Gulf at $58/t, and several other ethanol requirements remain uncovered. Ethylene dichloride is being seen on the spot market to India, and a ship that went on berth with a cargo of base oils has been filling out on smaller parcels of base oils and additives to India. Rates are in the region of low-mid $80s/t for 5,000-6,000 ton parcels to the west coast of India.

U.S. Gulf-to-Caribbean is another route that saw increased demand. Some base oil has been noted, along with a range of vegetable oil and tallow cargoes into the Caribbean.

The route from the U.S. Gulf to the east coast of South America has been fairly quiet, whereas outbound cargoes include base oils from Brazil and small parcels of chemicals, glycerine and tallow.

Transatlantic eastbound has been disappointing. Styrene was fixed earlier on, along with pyrolysis gasoline, biodiesel and acrylonitrile, but owners may have to concede a small reduction in freights.


August can often be quieter than July in Europe, and this year is no exception. Many of the short-haul coastal routes within Europe registered lower demand and deteriorating freight levels over the past week. Even the stalwart routes, such as Europe-to-Mediterranean, have suffered, which is unfortunate timing since there have been a greater number of vessels fixed back up to northwestern Europe which are now seeking cargoes back home. The chemicals market into Turkey, for instance, has switched off, and it may therefore be possible to obtain some competitive numbers for base oils in this direction over the next couple of weeks.

Demand remains reasonably strong in the West Mediterranean and ships that do come open in the area are quickly snapped up. Ship owners are undoubtedly grateful for the growth in biodiesel business in the area and the employment it provides. Base oil shipments have been quite slow from the Black Sea, possibly because owners have not yet fully embraced the concept of loading base oils from a floating storage vessel that is located in international waters off Kavkaz.

Transatlantic westbound demand is a little less right now. Some paraxylene demand clearly evaporated after the fire at the Cooper River site, but curiously there were reports of mid-to-high $60s/t being agreed on for a 5,000 ton cargo of paraxylene to Charleston. Evidently, there was no other ship available on the dates that could perform this shipment. Equally, there was confirmation that 8,000 tons of caustic from Runcorn, England, to the U.S. Atlantic Coast fetched high $30s/t, when the normal level would be in the mid $50s/t. The base oils tender to Punta Cardon, Venezuela, was eventually sourced from Antwerp-Rotterdam-Amsterdam.

Business has been slow on the Europe-to-Far East route. Several scheduled ships have remaining tanks to fill in September, while outsiders have slugged it out to virtually fill up all their remaining space, which is no mean feat given the paucity of business and that many of the parcels will have been small. Freight levels are roughly unchanged for now.

Europe-to-India-Middle East Gulf is performing fairly well and small parcels traffic is filling up the majority of scheduled carriers. Several base oil requirements have been noted, the levels for which will typically be in the mid $80s/t for 5,000 ton lots, with some scheduled carriers even wanting higher numbers.


It has been quite difficult to discern a trend in the domestic Asia market. Some ships have simply found it hard to fill up, leaving some prompt open space uncovered. Moreover, such ships are not all congregated into one particular area either, but rather they are spread all over Asia. On the other side of the coin there are other owners who have almost effortlessly managed to fix their ships far ahead into September. Charterers, too, have been having difficulty latching on to the right carrier at times and there are quite a few prompt parcels unfixed and not exclusively on any particular trade lane. There does not seem to be a uniform view of the market either. For example, some contend that southbound is soft, while others point to the large number of requirements waiting to find space, including some larger lots of base oils from Korea.

Asia export markets have been busier, especially to the U.S., where a number of benzene bookings have been made. Rates are in the high $50s to low-to-mid $60s/t range for cargoes from 10,000 tons to 5,000 tons. A number of biodiesel and palm oil cargoes have been covered in this direction in the mid-to-high $90s/t, which suggests an upward trend in freights.

Palm oil trades are slow to India and China but reasonably strong on the longer-haul routes.

It has been a quieter week in the Middle East Gulf-India region. Westbound is perhaps stable but eastbound has been slower and several ships have been chasing completion cargoes. Rates remain weak.

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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