SSY Base Oil Shipping Report


It was another very slow week in all corners of the world, which is understandable given that a large portion of the global chemicals and oils market has been on holiday.


U.S. Gulf-to-Europe rates took a tumble over the past week or two thanks to an injection of fresh tonnage. That now seems to have ceased and the situation is again looking tighter on vessel space for early October loading.

Styrene, glycols, acrylonitrile, methanol, ethylene dichloride and phenol have all featured this week, and although there have been some fixtures of styrene to Europe, traders have seen that selling the material into Asia instead has been potentially more profitable, and so freights are expected to stabilize at current levels. This would peg 5,000-ton parcels from Houston to Rotterdam at between $65 per metric ton and $69/t.

Some small volumes of base oil have also been appearing in the cargo lists, and it will be interesting to see if they develop into fixtures.

It has been a busier week on the U.S. Gulf-to-Far East route, helped by the addition of styrene interest. Space is now very tight for October. Furthermore, owners are reporting that contractual nominations are looking positive for November.

Some paraxylene is starting to appear, and one fixture of 10,000 tons is known to have been a combination of styrene and xylenes. Ethylene dichloride has also been noted and with existing steady demand for ethanol, freight rates are expected to start moving up from the current levels of low- to mid $60s/t for 5,000-ton parcels from Houston to Mainport Far East. There are still no base oils in the cargo mix, however.

Aside from a couple of small base oil deliveries and some paraxylene and caustic, trade from the U.S. Gulf to the east coast of South America has been rather muted. Pockets of space can be found on some of the regular operators for the first half of October but there is little appetite to send ships in this direction from owners with ships open in the U.S. Gulf. They see better alternatives, especially as the seed-crushing season is coming to an end and there should therefore be less vegetable oil to take back out from the region.

In the short-term, freights are expected to stabilize in the mid $60s/t based on 5,000-ton parcels from Houston to Santos.

It has been fairly busy into Mexico recently, with a number of orthoxylene, paraxylene, ethanol and acetone requirements noted. There are a lot of small parcels moving into Colombia too. On the base oil front, 12,000 tons managed to get fixed from the U.S. Gulf to Punta Cardon.


The North Sea and Baltic region has been undeniably quiet, but the message seems to be that there has been a fraction more new business over the past week than there was over the previous.

Most ships have at least managed to avoid having idle periods, but rates are being hammered by charterers. A couple of small base oil cargoes have been done from the Baltic but volumes are still lower than usual, with most material being booked for deep-sea destinations.

Southbound demand has been flat this week, especially with religious holidays in North Africa, Israel and Turkey causing a reduction in demand. Rates are very competitive – 5,000 tons of styrene from Gonfreville to Gebze was heard to have fixed at just $250,000, for example. Base oils should be able to achieve competitive rates into Turkey too.

Northbound rates on routine business have slipped a little further this week, with demand at reduced levels and still plenty of ships around for early October. Base oils are almost all in-house, with no real spot trading taking place.

Inter-Mediterranean cargo volumes have not been outstanding this week, but some owners report that there has been a fraction more business to aim for than there was last week. A few more cargoes of biodiesel, acid, clean petroleum and caustic has helped the situation. Base oils continue to move into Morocco, and evidently there has been a number of Black Sea shipments into Turkey too. Rates are pretty competitive all around.

Transatlantic prompt space is not so plentiful, but demand is rather stop/start too. Some more benzene was confirmed fixed, but then that opportunity closed again for the time being. Paraxylene is one of the more recent commodities to head across. Further caustic shipments are being performed and there has been some sulphuric acid, methanol and urea ammonia nitrate noted. Base oils were not so visible this week.

In the past day or so owners claim to have seen a number of new requirements to Asia, most of which are small parcels, however. Owners are holding onto their rate ideas, with 2,000-ton parcels from Antwerp-Rotterdam-Amsterdam to Mainport Far East attracting rates from low $90s/t up to $110/t. Traders do not see much potential to place base oils into Asia these days.

Going from Europe to the India/Middle East Gulf region, prompt space continues to be scarce, with owners asking $140/t for 1,000-ton parcels from the West Mediterranean to the west coast of India, for example. For scheduled ports, rates will be much more competitive, however. Ethylene dichloride cargo of 10,000 tons from Stade to the west coast of India was evidently fixed in the mid $70s/t, although there was tonnage available that would have been willing to accept even lower levels than this if the cargo had been quoted to them. Base oils are not that active right now, with material still flooding out from Iran.


The number of countries affected by holidays in Asia over the past week is extensive and consequently, none of the individual domestic routes has been that busy.

Base oils have managed to show on the intra-Far East routes, particularly into China. There has also been some interest in sending a couple of smaller parcels of base oils from Korea into Singapore and Southeast Asia.

It has been pretty easy to locate some very competitive space in the region, even from some of the outports about which owners normally make a big fuss, indicating that there are few other alternatives for them to chase.

In spite of talk of benzene being fixed into the U.S., there is little evidence to indicate that first half of October export business has actually been concluded. Instead, the second half of October is being discussed as the new target window. Rates remain competitive.

Most of the space to Europe has been covered with small parcels that still cost $125/t-$135/t, but there have been a couple of prompt carriers able to take 5,000-ton parcels from Korea to Antwerp-Rotterdam-Amsterdam and it may be possible to shave the usual numbers and come up with rates of $105/t-$110/t.

On routes from Asia to the India/Middle East Gulf region, space is also fairly tight in October, but there should be ample tonnage waiting in the wings. It will depend a bit on palm oils. Some suggest that demand has picked up in the last couple of days, but others believe it to be duplicated enquiries. Normally, there should be more palm oil enquiry in advance of the Diwali festival in India, but this year it seems to have been more subdued than normal.

The Middle East Gulf/India region is very quiet too due to the Eid holidays. Eastbound got off to a bright start with a number of large requirements quoted but as the week progressed these all fell by the wayside.

Westbound was a bit more interesting, especially with aromatics to Europe and the U.S., as well as more usual parcels of glycols and methanol. Space can be found for most destinations however, and rates are soft throughout the region.

Adrian Brown is a 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 12 0750 7507. In the London office SSYs Ian Roberts can be reached atfix@ssychems.comor +44 20 7977 7560 and in Singapore Jordi Maymi at +65 6854 7127.

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