SSY Base Oil Shipping Report


U.S. activity picked up again, causing some freights to stiffen. Europe has been steady overall, with both some small gains and some minor decreases on certain routes, and Asia also seems unchanged.


Routes to Europe are still some of the strongest out of the U.S. these days. The level of demand has far surpassed the amount of open space and so freight rates have continued to strengthen.

Styrene has been one of the most active commodities, but there have also been parcels of glycol, phenol, vinyl acetate monomer, ethanol, biodiesel, edible oils and cyclohexane. Owners contend that they are fixing 10,000-ton parcels from Houston to Antwerp-Rotterdam-Amsterdam in the mid $60s per metric ton, and some are seeking $90/t for 3,000-4,000-ton cargoes of phenol.

A parcel of 3,000-4,000-tons of base oils was looking for prompt space but the cargo is believed to have been withdrawn without being fixed.

A long-standing enquiry to ship up to 15,000 tons of base oils from Houston to Nigeria remains unfixed.

U.S. Gulf-to-Far East rates picked up again as it became apparent that nearly all the ships in June have been able to fill, with the only exceptions being some small pockets of space and a ship that has 10,000 tons of space but an unenviable last cargo history. Rates for 5,000-ton parcels from Houston to Mainport Far East are in a range of $59/t-$63/t, but outports can easily inflate that: 4,000 tons of ethanol from Houston to the Philippines paid low $90s/t, for example.

Base oils are said to be shipping from the U.S. Gulf to Brazil in quite big quantities and are encountering strong freight levels. The reason is that contractual demand is so strong that there is hardly any space remaining for spot cargoes. Nor is there a large surplus of readily available ships in the U.S. Gulf that can be switched over to this service, or any other service for that matter.

Traders are starting to talk of ethanol exports from the U.S. to Brazil which could be performed on larger, simple tankers which could in theory have some part-space available for larger cargoes such as base oils.

With no new ships appearing on the horizon, or at least on this side of July, the market into the Caribbean continues to be strong. Some very hefty rates are said to have been paid on a couple of the regional ethanol shipments recently, and methanol too has seen a flurry of excitement from the Caribbean back to the U.S. Gulf.

Many of the other requirements, including some for base oils into Colombia and Dominican Republic, have been put on hold until more space is freed up.

On U.S. Gulf-to-India/Middle East Gulf region routes, space remains tight through to August as strong contractual nominations continue to fill the nominated vessels. A number of traders have been pushing assorted cargoes of ethanol for June loading, while base oils and other speciality chemicals compete for space. Rates for 5,000-ton parcels from Houston to Mumbai have climbed into the upper $80s/t.


The North Sea and Baltic region has been busier over the past week, and it seems to be gasoline-related products that are driving it, namely MTBE, ethanol, biodiesel, reformate etc. Space has tightened up again, and quite a few vessels have forged a program all the way into July. Rates are back on a firm footing once again after dipping in the previous week.

Base oils have been sighted shipping from the Baltic into the U.K. and Antwerp-Rotterdam-Amsterdam, and there seems to have been some spot business along the European coast as well. In addition to all this, there have been some large movements out of the Baltic down to Antwerp-Rotterdam-Amsterdam for transhipment.

There is a long list of requirements to be shipped southbound into the Mediterranean, leading to yet another week of mostly firm freight levels. There have been several exceptions, however, as a minority of owners began to fret about having open vessels and quickly booked whatever they could. Other owners were less anxious and realised that having a prompt ship actually meant being able to secure higher freight rates, such as 50s/t for 6,000 tons to the west coast of Italy when the regular rate is 10/t less. Spot base oils have been considered for Turkey and Bulgaria.

On the whole, northbound demand is positive, but there are similarities with the southbound route where some owners have opted not to contest the rate levels but instead sought to ensure their ships are full, even if they could perhaps have obtained a slightly higher number. For example, 6,000 tons of pyrolysis gasoline from Venice to Antwerp-Rotterdam-Amsterdam went in the upper 30s/t rather than the usual low 40s/t. At the same time, there is mention of a cargo of paraxylene being fixed from the East Mediterranean to Antwerp-Rotterdam-Amsterdam at much, much higher numbers than this.

On inter-Mediterranean routes, the week started off on a quiet note, having seen several ships open prompt in the West Mediterranean, which is a very unusual occurrence. However, within a few days they were all fixed away, with one of them taking a spot base oils cargo from Spain to Greece.

By the end of the week, the West Mediterranean had become tight once again and rates were back to the usual pattern. Biodiesel, aromatics, MTBE, caustic, ethanol and vegetable oil are among the top commodities in demand. However, there has also been a smattering of spot base oils requirements on top of the regular term shipments.

Transatlantic trade picked up slightly and it became clear that there was not a great deal of open space after all. Rates for 5,000-ton parcels from Rotterdam to the U.S. Atlantic coast were being done in the $43/t-$44/t area, and in hindsight, owners realised they could have probably pushed those levels even higher. Paraxylene has been one of the main drivers, with a total of 15,000 tons being fixed on one ship alone, with further requirements outstanding. A cargo of nearly 7,000 tons of base oils – mainly heavy neutrals with some bright stock – was heard to have been worked into the U.S. Gulf in the high $40/t.

For the moment, rates on Europe-to-Far East routes are holding for June loading, but only because there is not much space left. One of the last June ships is known to have taken 5,000 tons of paraxylene in the low $90s/t, and is also believed to have taken 5,000 tons of base oils from Rotterdam to Singapore. However, looking into July, contractual nominations are lower than normal, which could prompt a round of freight rate decreases.

Good demand on routes from Europe to the India/Middle East Gulf region continues to be seen, with a number of requirements still uncovered, including aromatics, base oils, ethanol and vegetable oil.

Easy chemicals in the amount of 2,000 tons from the west coast of Italy to Kandla paid around $115/t, but 2,000 tons of vegetable oil from South Spain to the U.A.E. went for mid $80s/t, both for loading in June, which beautifully demonstrates why each and every requirement is unique and has to be considered on its own merits.


Not every owner is satisfied with developments in the domestic Asia market, some complaining that demand southbound into Southeast Asia is rather slow, and also some have remarked that intra-Far East is not what it should be. Besides that, however, the bulk of the fleet has moved on into July and on some routes – such as northbound and inter-Southeast Asia – there is actually a shortage of prompt tonnage.

Base oil enquiry levels have improved with requirements noted into China and also some demand originating out of Southeast Asia. Rates are largely composed with little fluctuation for the moment.

Rates are still very mixed up on export cargoes, depending on whether or not the ports fall into the category of scheduled ports. As mentioned last week, there is a wide range of numbers still in place this week, depending upon which ports are involved. This week has seen a veritable flood of small parcels looking to move into Europe, but not many larger cargoes.

Base oils have been listed as looking to ship to Europe, which is apparently unexpected, at least based on current pricing. A couple of benzene cargoes were spotted looking to ship from Korea to the U.S. Gulf for July, which is noteworthy since the volume of benzene shipped in May was considerably lower than normal, and June is looking skimpy too. Rates are mostly unchanged in this direction.

The rush of palm oil cargoes into India and Pakistan has continued unabated this week, keeping rates stable despite Ramadan, which is due to start June 18. Deep-sea palm oil activity is steady, but nothing more exciting than that.

The Middle East Gulf/India region has been extremely busy again, allowing owners to keep a strong grip on freight levels. Lengthy port delays have been reported at Al Jubail, Saudi Arabia, as well as Kandla, India, and Haldia, India, which has therefore had an impact on the amount of vessel space that is available. Rates are firm on all routes out of the region, although owners seem content to keep them at current levels without pushing too hard for further increases.

Adrian Brown is a 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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