SSY Base Oil Shipping Report


There has been a more summery feel to the markets this week, and activity has been notably slower in Asia. Some areas in Europe have seen a slight reduction in demand and lower freight levels, whereas rates from the United States are basically unchanged.


All the usual styrene traders have been searching out ships both in July and August which can take styrene from the U.S. Gulf across to Europe. However, space is scarce and opportunistic owners are quoting levels in the mid $90s per metric ton for 3,000-ton parcels from the U.S. Gulf to Antwerp-Rotterdam-Amsterdam. Such levels are too rich for products such as styrene, where mid $60s/t has been the going level recently. In addition, 3,000-ton base oils from Houston to Havre are claimed to have gone in the mid $60s/t too, which is a very competitive level, only made possible because that particular route supports scheduled base oil shipments. Aside from these, there have been all the usual requirements that we have become accustomed to seeing over the past month.

On U.S. Gulf-to-Far East routes, a bit of July space opened up during the week when a contract holder was unable to supply the entire quantity of cargo. Beyond that, there are several first half August position with space. Freight levels have not been tested so far. Ethanol is one of the hottest products, with at least 3 parcels each of 10,000cbm booked to the Philippines. Rates are typically mid $70s/t. A 20,000-ton methanol shipment was heard to have fixed from Trinidad to China in the low $60s/t. Base oils are not on the list to be shipped this week, however.

Finding vessel space from the U.S. Gulf to the east coast of South America is a real challenge until mid-August. The only hope has to be that some ethanol gets fixed into Brazil on an outsider, which could then fill out on smaller parcels. Rates are notionally unchanged.

Base oils have been among the more active products on the U.S. Gulf-to-Caribbean route this week, with fixtures concluded into Colombia and Rio Haina, and the next tender for Colombia is already out and calls for 5,100 tons for August shipment. In addition, there have been enquiries into Jamaica and also several traders have come back looking to ship 15,000-17,000-ton cargoes of base oil to West Africa.

Freight levels have already been firm, and after this week, rates have gone up some more. Even 5,000-ton parcels into Mexico are seeing mid $30s/t, while 10,000 tons of vegetable oil from the U.S. Gulf to Venezuela is claimed to have gone at $55/t.

It was somewhat premature last week to forecast that base oil demand had peaked into India since several parcels were fixed from the U.S. Gulf over the past week, paying low $80s/t for 10,000-ton quantities. Further base oil enquiries to India and the Middle East Gulf are being studied. Some bigger lots of vegetable oil have also been moving in the mid $90s/t for multiple port discharge.


The North Sea and Baltic region is not quite as solid as it has been for the past couple of months. Not that there is a lot of open tonnage. Indeed, the main fleets in the area do not have much open space left for July, but brokers have been noticing that they receive more interest from owners for cargoes that they are quoting. The small clean petroleum market, however, has picked up since last week and many ships are now fixed until the end of July or early August. A bit of spot activity has been taking place in base oils, but most requirements are being generated by major producers who are performing contractual deliveries.

The occasional southbound prompt vessel has been advertising for part-cargoes into the Mediterranean, but on the whole the route has been reasonably buoyant. Some base oils have been looking to ship into Turkey, and rates have slipped a little. The reason is actually fairly banal and owes more to offices being short-staffed and therefore having less time to fight over the last dollar than anything about supply/demand.

Southbound 5,000 to 6,000-ton parcels of base oils Antwerp-Rotterdam-Amsterdam-to-Marmara should be bookable in the mid $40s/t currently. For example, 6,000-tons of paraxylene from Rotterdam to Iskenderun went for around $43/t. Now that Ramadan is over, the route into Turkey and North Africa is expected to see an increase in demand, which might stop the slide in rates.

It has been quieter on the northbound route, and prompt ships can be seen in both the East Mediterranean and West Mediterranean with space to Northwest Europe. Pyrolysis gasoline has been one of the principle commodities moving, but nothing has been seen in terms of spot base oil demand. Rates may weaken.

There may have been one or two more prompt open positions this week in the West Mediterranean, but generally inter-Mediterranean routes have been strong, and space is not easy to locate. For example, 10,000 tons of clean petroleum from South Spain to Canary Islands returned a level of $30/t, reflecting the scarcity of this size of ship. Looking ahead, the summer holiday season is expected to kick in within a week or so, and the tight tonnage situation should start to ease.

There has been quite a lot of demand for paraxylene on transatlantic routes over the past week, yet in spite of this there are still some prompt ships with space. Rates were already starting to display some weakness, with levels for 5,000-ton parcels from Rotterdam to Houston being pegged in the mid $40s/t. Quite a bit of material has been sourced from places like Kotka, Gonfreville and Haifa, where rates are at a premium to Rotterdam levels. Base oils have not really been a topic for discussion, and instead there have been shipments of orthoxylene, paraxylene, mixed xylenes, toluene, sulphuric acid, acetic acid, cyclohexanone and urea ammonia nitrate.

Base oil to Singapore has been one of the few cargoes being fixed on the Europe-to-Far East route. Otherwise things are very dull, and the prospects going forward are not that rosy. Paraxylene has been a mainstay of the route, but there are now so many other production sites closer to Asia, that this commodity may not be as active as in the past. Cargoes like ethylene dichloride, acrylonitrile, acetone and phenol are too sporadic and rely heavily on pricings arbs and so owners may start to reconsider how many ships they allocate to this service in future. Either that, or else rates will become more volatile than owners have been used to.

Base oil enquiries are still trickling out to India and the Middle East Gulf, in addition to the small lots to Singapore and Vietnam. Ships have been taking pyrolysis gasoline, ethanol and vegetable oil primarily, however. Rates are stable, or have a slightly weaker tendency since there are several ships looking for completion cargoes out of the Mediterranean.


Many commentators have already written off the domestic Asian market for the summer, proclaiming that demand is poor all over and rates are falling. Indeed, this appears to be correct on some trade lanes, such as intra-Far East and southbound into Southeast Asia, where rates have clearly dropped.

Looking ahead, there seem to be fewer requirements quoted, but it has to be remembered that Indonesia and Malaysia have effectively been out of the market due to the Eid ul-Fitr celebrations at the end of Ramadan. Singapore too had a national holiday, which automatically caused business to slow. Only in the next week or two will it be possible to determine if these routes have noticed any fundamental reduction in trade.

Benzene, mixed xylenes and paraxylene from Asia to the U.S. has been on everyones lips recently. However, there are still ships open with space over the next month or so, which means that rates are not really increasing and indeed leads to questions as to how much benzene will actually be done.

Asia-to-Europe has not been that bright, with several of the main carriers having open space. Fortunately for them, there have not been so many outsiders and so rates have not cratered. As it is, a couple of in-house base oil deliveries have been booked from Southeast Asia to Northwest Europe, and levels have been in the mid $80s/t, which is a touch lower than normal. The route between Asia-India and Middle East Gulf has seen some base oil interest, and rates appear to be stable, probably buoyed up by the palm oil rates that have not altered.

Nothing much has changed in the area of palm oil shipments. The only thing of special note has been the number of large shipments to West Africa, which have been paying around $70/t but for 30,000-35,000-ton sizes. The opportunity to take a parcel of base oils as completion cargo is fairly remote, however.

The Middle East Gulf/India region has of course been relatively subdued during the occasion of Eid ul-Fitr. All the same, the market has produced some interesting possibilities on the chemical side. Rates have been surprisingly competitive to the U.S., with mid $60s/t being fixed for large cargoes of aromatics. Regional trades have been tight for parcels and some cargoes have been seeking ships for over a month already, without success. Even voyages of two-three days duration have been paying close to $30/t for 7,000-ton quantities.

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 12 0750 7507. In the London office SSYs Ian Roberts can be reached at or +44 20 7977 7560 and in Singapore Jordi Maymi at +65 6854 7127.

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