SSY Base Oil Shipping Report


The U.S. is developing a much tighter space situation through improved demand. Europe has been busy as well, and some routes are noticing a slight upward trend in freight. Asia, however, has come off the boil.

U.S. Gulf

There has at last been some kind of year-end push across the majority of U.S. trade lanes.

U.S. Gulf-to-Far East, for example, has only small amounts of space left for December loading, yet there are still quite a few cargoes left uncovered, including 10,000 tons of paraxylene, 10,000 tons of acetic acid, 8,000 tons of ethylene dichloride, 5,000 tons of acrylonitrile, 5,000 tons of styrene, 3,000-5,000 tons of monoethylene glycol and 10,000 cubic meters of ethanol. Rates continue to move upward but only in a notional way. Should an outsider be enticed on berth, it would seek freight rates in the $70s or $80s per metric ton, for example, which is much higher than the current mid-high $60s/t.

Transatlantic eastbound is similar to some extent. Parcels in the amount of 5,000 tons from Houston to Rotterdam are pegged at around $50/t, but as soon as non-scheduled ports are mentioned then those rates shoot up into the $60s/t. There really is not a lot of open space remaining on the scheduled carriers. Styrene has been especially active, but there are requirements for phenol, cyclohexane, urea ammonia nitrate and base oils. One large cargo of base oils has just loaded for Europe, and the story goes that this cargo should have been sent to India, but due to falling prices this cargo and another large slug for other traders were both cancelled. The new orders for December shipment are more modest, at around 3,000-4,000 tons.

U.S. Gulf-to-east coast of South America sees a slight uptick in demand as well, and whilst there are a couple of ships left that can provide space in December, the general mood is that rates are now into the low $60s/t for 5,000-ton parcels.

U.S. Gulf-to-Caribbean is reported to be short on space for the rest of December, at least where larger cargoes are concerned. There are a couple of small ships with part-cargo space but those are only really suitable for parcels up to 3,000 tons.


It has been another active week in the North Sea and Baltic and most ships are booked ahead by a week to 10 days. There is clearly an element of year-end settlement about this market. There have been certain regular shipments that have been absent for the past month or two, possibly due to falling commodity prices, but now there is a rush to get these movements performed before the end of the year, and as soon as one cargo is booked, there is a repeat shipment quoted. On the whole, owners are content to perform these at the same levels as before, but due to lower bunker costs, the net result is a much better one for the owners.

Southbound into the Mediterranean has been very busy, driven by FAME requirements, some of which are very large and much bigger than normal. Again, this could perhaps be attributed to year-end rush. Base oils are moving on this route too, especially into Turkey for both Turkish and western traders. Rates are starting to bounce upward and owners are quoting high $60s and low $70s/t for 2,000-ton parcels from Rotterdam to Gebze.

Northbound has had a reasonable amount of demand and rates are being maintained. Caustic, ETBE, methanol, styrene, aromatics and vegetable oil have all been competing for space.

Inter-Mediterranean markets are becoming busier as well, with some rates going at much higher levels than before. Clean petroleum and vegetable oil are among the main drivers. Not even many shipping people are aware of quite how much vegetable oil is moved from the Black Sea, with Novembers total being somewhere close to 500,000 tons. Much of it, of course, goes east of Suez, but a sizeable volume remains within Europe. Base oils have had a presence in the Mediterranean but falling prices are a real obstacle to finalizing the trades.

Transatlantic westbound has been really quite active and since space has tightened, owners are finding they can push freight levels up fairly easily. A parcel of 7,000 tons of easy chemicals from Rotterdam to Houston is reported to have gone at $55/t, up by $10/t from a similar fixture made by the same owner just over a week ago. Benzene, pyrolysis gasoline, paraxylene, caustic, sulfuric acid, MTBE, orthoxylene, wax and urea ammonia nitrate have all been seen. The base oil requirement to Punta Cardon was mostly covered out of the West Mediterranean.

Europe-to-Far East has not seen that much quoted on the spot market but owners report a steady flow of contractual cargoes, meaning they are less reliant on filling out with spot cargoes. Some bright stock has been in evidence, but volumes are not large. Rates are stable.

Europe-to-India/Middle East Gulf has produced a bit more by way of base oil demand but it remains to be seen how much material actually gets fixed. Rates are steady for now.


The domestic Asia market began its year-end rush quite early on, but if this last week is anything to go by, it is beginning to run out of steam. A sizeable number of ships are actually fixed into January, but there is still a substantial number that require at least one more voyage to cover them for the entire holiday season. Trade has been thin on some routes, however.

The busiest area is definitely the intra-Far East region and owners would ideally like to keep their ships stationed here. The winter fuels market is starting to generate more demand which will deprive the market of a number of Korean operators.

Southbound markets have also been reasonably firm but the problem seems to be how to get back north again afterwards.

The intra-Southeast Asia market doesnt provide much relief. Base oils have strangely evaporated. Last week saw many more requirements than this, especially out of Korea, but owners have commented on how few new requirements have been seen. Typhoon Hagupit did have some influence on the intra-Southeast Asia market, but more on other products than base oils.

Asia export trades have been fairly robust. Benzene continues to move in large volumes to the U.S., albeit with slightly lower freights. There is still part-cargo space available in this direction. Some base oil exports from Korea have been noted to both the U.S. and to Europe. In the case of Europe, freights range from $115/t to $150/t, depending upon quantities and discharge options.

Palm oil markets are subdued locally but still lively enough to the West.

The Middle East Gulf-India region has also looked slower over the past week, in particular the eastbound route. It is still possible to fix 10,000-ton parcels Middle East Gulf-to-Southeast Asia in the mid $40s/t. Westbound is fairly strong, however, and the same cargo will cost mid-high $70s/t.

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

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