SSY Base Oil Shipping Report

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It has been very quiet in the European market the last few weeks. The U.S. is not very busy either, but there are splashes of activity. Asian markets are steady but lack sparkle.

U.S. Gulf

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The most interesting of the United States routes is probably the one into Asia. There have been plenty of requirements, but the number of fixtures reported is still pretty lean, suggesting that much is being done off-market. Further proof of this is the amount of prompt open space that has gradually reduced. Rates have been steadily rising, with 5,000 ton parcels of easy chemicals from the U.S. Gulf to Mainport Far East now fetching low $60s per metric ton. The list of outstanding requirements is quite impressive too, with large slugs of mixed xylenes, paraxylene, ethanol and phenol detected.

The route from the U.S. Gulf to India-Middle East Gulf is also quite firm after the last couple of scheduled September ships took a large cargo each, one of 10,000 tons of ethylene dichloride and the other of base oils. There are suggestions the base oils cargo may have gone in the upper $80s/t, although other owners suggest that they would have taken it in the upper $70s/t.

Transatlantic eastbound routes have been steady. Styrene has again been fixing, and there is interest in products such as ethanol, ethanolamine, acetic acid and acid oil. Rates are mid $40s/t for 5,000 ton parcels from Houston to Rotterdam.

U.S. Gulf-to-east coast of South America is a little weaker, with rates starting to slide close to $60/t for 5,000 ton parcels from Houston to Santos. Some base oils have been seen looking to ship into Brazil from the U.S. Gulf.

The Caribbean is pretty quiet overall.

Europe

It has been another bleak spell in the North Sea and Baltic markets, and many owners have open ships. There is nothing really that stands out in this region. Even biodiesel shipments are muted.

Southbound into the Mediterranean has been hard for owners, but this was predicted a couple of weeks back when it became clear there would be so many Mediterranean ships making their way north. Sadly for them, demand for space flaked, especially into the East Mediterranean. Base oil interest has been mainly confined to oil company shipments, although there was an interesting shipment of over 10,000 tons that loaded in the Baltic which was originally destined to go to the Black Sea.

Northbound has been unexciting, as is the intra-Mediterranean market. For a brief time, it looked as though the Mediterranean market was starting to become busier, but the last day or so has thrown up a large number of prompt positions throughout all areas.

Transatlantic westbound is marginally busier this week compared to last, but there is still plenty of keen interest from ship owners willing to commit tonnage on berth. Pyrolysis gasoline in the amount of 10,000 tons from Antwerp-Rotterdam-Amsterdam to the U.S. Gulf was heard to have fixed in the mid-high $30s/t, which is a competitive number, but is actually a completion cargo after the vessel loaded sulphuric acid in the Baltic for around $40/t. The base oils tender into Venezuela has seen a large number of freight enquiries from all over Europe.

Europe-to-Far East is still pretty quiet. A couple of paraxylene enquiries have spiced things up and there is a possible base oils requirement from the Mediterranean to Southeast Asia or China.

Europe-to-India-Middle East Gulf does see trader interest in base oils but owners seem to want to load vegetable oils from the Black Sea instead.

Asia

Freights have risen fractionally on a couple of domestic Asia routes, such as intra-Southeast Asia. Ships with stainless steel tanks have been in particular demand, and a similar situation exists on northbound routes. It has not been that busy further up, however, with relatively few aromatics parcels moving on the spot market from Korea into China, and there are ships open with some space, keeping freights competitive. Southbound has not been that busy either. In terms of base oils, there have been a couple of sales tenders from Southeast Asia that have caused trader interest in shipping the material into China, while southbound has seen base oil cargoes from Mailiao and Korea.

Space is tight on the Asia-to-India service, but rates have not really moved up so far. Owners are becoming less inclined to send ships in this direction due to lengthy port delays in India that then affect any subsequent booking thereafter.

Palm oil markets are reasonably busy with a multitude of enquiries in almost every direction.

Asia export markets are active and space is tight on some sections. Large slugs of benzene have been fixing to the U.S. Gulf, with assorted enquiries to outports in Europe, none of which holds that much appeal to owners. Rates are stable.

The Middle East Gulf-India market is following an established pattern. Contractual demand is good and filling a lot of tonnage, but port delays in the region are causing a number of cancellations, resulting in a bit of a scramble for prompt space and also for replacement cargoes.

Adrian Brown is senior market analyst for chemicals and base oils with SSY Shipbrokers, London. Information about SSY can be found at www.ssyonline.com. Adrian Brown, in the U.K., can be reached at fix@ssychems.com or by phone at +44 1207-507507. In the London office SSYs Panos Giannoulis can be reached at fix@ssychems.com or +44 20 7977 7538 and in Singapore Jordi Maymi at +65 6854 7127.

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