SSY Base Oil Shipping Report


A perceptible tightening of space in Asia, Europe and the U.S. Gulf has transpired without fanfare – the market has even been perceived as quiet to those not looking for space in earnest.


An arbitrage opened up to ship styrene to Europe on prompt dates, but few cargoes are believed to have fixed since prompt space is scarce.

There are a lot of other possibilities to be shipped too, including cargoes of ethanol, glycols, cumene, acrylonitrile, amines, vinyl acetate monomer, methanol, talloil, biodiesel, acetic acid, phenol and chlorinated solvents.

Strangely, freight rates have gone down rather than increased as would have been expected, with 5,000-ton parcels from Houston to Rotterdam now pegged in the mid- to high $50s per metric ton.

The U.S. Gulf-to-Far East is another route on which demand for space far exceeds available space, and here too rates seem not to be responding.

It could be argued that with the price of bunkers now so low (just $175/t in Houston for heavy fuel oil), that owners are content to keep levels where they are, but markets seldom work like that. It is more probable that inertia has set in and the distractions of Christmas parties are starting to play a part.

No base oils are able to find a home on this route. Instead, demand consists of ethylene dichloride, ethanol, styrene, phenol and some xylene possibilities.

Space on ships going to the east coast of South America has tightened for late December shipment, and this may become an obstacle for the remaining requirements that have been quoted, such as caustic, ethanol and small lots of naphtha, gasoil and ultra low-sulfur diesel.

Base oils have been seen looking to move into Brazil from the Mediterranean, but there is nothing showing at the moment from the U.S. Gulf. Rates are static.

The shortage of vessel space on routes to the Caribbean has also meant that little has been accomplished over the past week.

One of the base oil tenders into Rio Haina has been rescinded and is expected to be back out in January, but there is still a chance that another smaller requirement could still be booked for end December loading. The tender for 2,000 tons of base oils into Cartagena, Colombia, remains outstanding.

There is still a good possibility that base oils could be sent to India,with various quantities under discussion. Rates are still in the upper $70s/t or low $80s/t for 5,000-ton parcels.


The North Sea and Baltic region had a busy week and most ships are booked up until mid December or later. Rates are looking stronger too, with increases of 1/t-2/t being noted.

Base oils have been spot traded, but the bulk of shipping enquiries are coming from products that are associated with gasoline blending, such as ethanol, biodiesel, MTBE, alkylates and so on.

There is southbound space into the Mediterranean from December 15-20, and at unchanged levels too, but securing prompt space is far from easy and several such cargoes are still quoted around, having already been out in the market for over a week.

Base oils are having a quieter time of it, and most requirements are the usual grades, such as biodiesel, caustic, aromatics, ethanol, ethylene dichloride and so on. It should be possible to fix a 2,000-ton cargo of base oils from Rotterdam to Gebze for mid $60s/t, or even a little less.

The northbound route is also well booked and there really is not that much space left. A couple of ships that almost never leave the Mediterranean have been tempted north by the prospect of rich rewards, which is a sure sign of the tightness.

There is no news yet whether any of the base oil requirements that were out last week from the East Mediterranean and Black Sea to Antwerp-Rotterdam-Amsterdam have been covered or not.

Further strong inter-Mediterranean demand over the past week has caused even greater tightness in the West Mediterranean, and in a few cases, higher rates have been reported.

Even out of the Black Sea there appears to be a shortage of suitable space for some grades, while even vegetable oil is noted as paying up, with levels in the $50s/t being recorded to Spain for instance. Recent levels have been in the $40s/t.

It has not been a hugely exciting week for transatlantic trade, but there are not so many ships around just now so that rates have not softened.

There still seems to be some paraxylene and benzene activity, as well as some caustic and sulphuric acid around. A cargo of 10,000 tons of paraxylene from Rotterdam to Mexico was out looking for space, with the intention of fixing in the high $30s/t, as per a recent similar shipment, but since the market has tightened in the meantime, owners are looking more for very high $50s/t this time around.

Base oil activity is subdued to the U.S. Gulf.

There was a brief spell of heightened activity into Asia, but it seems not to have lasted. A couple of base oil parcels were fixed, although neither were the usual API Group I grades.

Some mixed xylenes, paraxylene, orthoxylene and ethylene dichloride cargoes are believed to have been covered too, as well as some butanols and acrylonitrile that originated from the Baltic.

December space is starting to dry up, but should there be more demand, as would be expected in advance of the Chinese New Year, then there are a number of owners who could insert additional tonnage onto the route.

Whilst not busy, there has been a steady trickle of chemicals parcels moving into India and the Middle East Gulf, which is enough to stop freight rates from eroding. Base oils have been quiet, apart from a possible cargo from the Mediterranean into the Red Sea.


A mixture of improved demand and bad weather in Korea and China has had the effect of tightening domestic Asia vessel space and giving a slight boost to freight rates.

A cargo of 10,000 tons of aromatics was fixed from Korea to mid China at around $17/t-$19/t, compared to a week or so ago when the rates were ranging from $16/t-$18/t. Three thousand-ton parcels from Korea to mid China are now fetching $24/t instead of $22/t-$23/t.

Base oils are not high on the list of requirements this week, and instead, demand is focused on aromatics, MTBE, styrene and a little more clean petroleum as the colder weather starts to bite.

Export benzene is apparently still workable to the U.S. Gulf, although traders are mainly looking for January ships now. Rates on these parcels have risen from the high $40s/t to low- to mid $50s/t, and as space tightens further owners may risk adding a little more to the numbers.

The market to Europe is slightly strange. Some owners are willing to accept rates that are some $10/t lower than last week, but only based on specific ports to cargoes, and yet for other requirements they still want unchanged numbers, namely $110/t-$115/t.

Small parcels of base oil were noted, but base oil is not that common. Most requirements are composed of small parcels of acrylates, acids, biodiesel, cyclohexane and heavy aromatics.

Palm oil rates have gone down even further to India, with levels of high $20s/t now being routinely fixed. That said, demand seems to have picked up slightly, but all the same there are plenty of potential carriers open in Asia. Rates to China are hovering in the low-to mid-$30s/t.

The Middle East Gulf/India region has had another quiet week. Strong winds in the Middle East Gulf region have caused some disruption to schedules, and severe flooding in the east coast of India has ruled out cargoes in this direction. Port delays are an ever-present factor too in Al Jubail, and turnaround times in Kandla and Karachi are starting to lengthen again. Rates are consequently unchanged.

Base oil exports from Iran and the United Arab Emirates remain flat.

Eastbound volumes have been poor this week, with perhaps only 6 or 7 significant cargoes quoted, excluding the routine orthoxylene, paraxylene, benzene and pyrolysis gasoline cargoes from India. Rates are generally stable.

A couple more westbound requirements have been noted in this direction, but nothing to shake the rates. Several ships still have December space.

A cargo of base oils was quoted from Sharjah to Gebze, and there was suitable tonnage in position to load it, but it is not known yet if it has been covered.

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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