SSY Base Oil Shipping Report


The U.S. market is a touch slower, but the situation is not as dramatic as some make it out to be. Europe is slow but steady and that can probably be said of Asia, too.

U.S. Gulf

On the face of it, there have been so many cargoes quoted to the Far East this week that any remaining space in August should have been easily covered. But it has not, which suggests that much of the enquiry is tentative. Traders have been advised that freight rates are falling and are checking to see by how much, and each is goading on the other, claiming that they have ever lower numbers.

All the owners are fed the same stories and whilst most will draw a line in the sand as to how low they will go, there have been one or two who are suspect, and that is all it has taken to fan the flames. Freight rates have therefore weakened on a market that is full of opportunity. Styrene has been talked about, as has ethylbenzene, paraxylene and ethylene dichloride. Ethanol and methanol remain quiet, as do base oils.

The transatlantic eastbound route is another that is full of enquiry, but as with the route into Asia, many of the requirements are either duplicates, lack the physical availability of material, or are simply an exercise to probe how low rates can be squeezed. Benzene, cumene, monoethylene glycol, acrylonitrile, styrene, ethylene dichloride, ethanol, urea ammonia nitrate, palm oil and molasses have all been recorded this week.

Contractual demand to the Caribbean seems to be under pressure, and there are more ships than normal that have space to fill. Rates have come under pressure as a result. Charterers with 400 tons of methanol from the U.S. Gulf to Rio Haina, Dominican Republic, are hopeful of achieving a rate of around $35,000 – some $8,000 less than the previous fixture.

Paraxylene in the amount of 5,000 tons from the U.S. Gulf to Altamira, Mexico, went for a rate that is rumored to be less than $25 per metric ton. 8,000 tons of caustic from the Texas Gulf to Coatzacoalcos, Mexico, fixed at $20/t, while 13,000 tons of caustic from the U.S. Gulf to Matanzas, Cuba, paid in the mid $50s/t.

The picture southbound to the east coast South America is pretty much unchanged. There are several prompt ships with space, but there is not a great deal moving. The requirement for 3,500 tons of base oils into Santos was worked, but failed to fix cleanly on the early August dates and is back out off slightly later dates.


The weak fuels market continues to limit the amount of FAME being traded in the North Sea and Baltic Sea regions, but otherwise there have been some useful requirements this week, with plenty of caustic and ethylene dichloride, ethanol, MTBE, acrylonitrile, aniline, pyrolysis gasoline and a couple of base oil fixtures on top. It is certainly not busy, but the market has not collapsed. Rates are mainly intact. From time to time, owners concede 1,000 here or there, but it is mostly tokenistic.

So far, there does not seem to have been any noticeable reduction in the amount of trade being conducted southbound into Turkey following the attempted coup. Only the one fixture of base oils has been recorded, but other grades, such as caustic, styrene, acrylonitrile, lignin and ethanol have all been worked. There are a couple of Mediterranean ships open in Antwerp-Rotterdam-Amsterdam that are seeking return cargoes and if they have the right attributes, they could offer some interesting levels. Otherwise, rates are steady.

Northbound demand has picked up slightly compared to the previous week. Pyrolysis gasoline from Rijeka, Croatia, and Kulevi, Georgia, are quoted, as are aromatics from Spain, Italy and Portugal. A couple of interesting benzene cargoes have been seen, including one that was fixed from the Black Sea. Base oils are mostly contractual this week.

There are not as many prompt open ships for Inter-Mediterranean trade this week, as more cargoes have been quoted and fixed. Rates are sometimes a little lower, by around 1,000-2,000, but there is enough choice of cargo around that owners can avoid the cargoes that pay the least. A number of base oil movements have taken place in the West Mediterranean, but only the one cargo from Port Kavkaz, Russia.

Transatlantic rates are very much up and down, week by week. A good barometer has been the freight rates recorded for 5,000 tons of paraxylene from Rotterdam to the east coast of Mexico, which secured $34/t for the first half of July, then a week later paid $50/t and is now being worked for August loading and expected to reveal levels in the $30s/t again. Demand is somewhat sluggish currently. Some small parcels of base oils were worked but apparently have been postponed.

It is a still a long way from recovery for routes to the Far East, but there have been more requirements quoted over the past week. The majority are for small lots, with 5,000 tons of paraxylene being about the largest and therefore unlikely to attract any additional ships on berth. Rates are likely to stay unchanged. Some base oils have been quoted, but it remains to be seen whether any of them conclude.

Base oils have cropped up on the enquiry lists into India and the United Arab Emirates. Rates offered have been higher than the charterers expected, with levels in the $90s/t and $100s/t being seen for 3,000-ton quantities. Demand is quite strong, however, with lots of small parcels of chemicals around. Phosphoric acid prices have been settled into India too, and so acid is swallowing up some candidates. Vegetable oil has also been reasonably busy from the Black Sea, although rates are down a little.


The market in general is pretty quiet, and clearly some ships are unable to piece together sufficient cargoes to create much of a forwards program. There are, however, some ships that have managed to fix through into the second half of August, but it is random and not linked to any particular route. Rates are felt to be close to rock bottom and lower numbers have rarely been encountered on domestic Asia business this week.

The bright spots have to be the improvement in palm oil demand into the Indian Ocean region, as well as a pick-up in small clean petroleum shipments throughout Asia. Northbound cargo volumes are also stronger and more varied. A number of plants that had been down for maintenance or even for economic reasons are slated to start back up in August, which could help, though more plants in Northeast Asia are due to go down over the same period. Several weeks of sustained activity will be necessary in order to clear out much of the open tonnage, but in reality, this is unlikely as it is still the summer.

There have been numerous benzene enquiries on the transpacific export route for August. The main issue will be whether there is sufficient physical material for all of them, which is dubious. Owners are talking rates for the second half of August in the high $30s/t and low $40s/t for typical 9,000-ton cargoes. These levels are pretty standard and have been in place for quite some time now. To obtain the keenest rates (which are a good $5/t lower than these) would entail loading very promptly, which is beyond the capability of most traders.

The market to Europe remains quiet for the bigger lots, which have weaker rates. But for small lots, such as 1,500-ton parcels from Korea to Antwerp-Rotterdam-Amsterdam, the levels are more like $155/t – which was done this week, for example.

The Middle East Gulf/India region continues to be lifeless, especially on the eastbound routes. Some ships have been open for up to two weeks without actually making a single fixture. Westbound has a little more to offer, with several cargoes of caustic talked, as well as cargoes of MTBE, ethylene dichloride, methanol, glycols and benzene. Sulphuric acid in the amount of 19,000 tons was booked from India to Morocco and 4,000 tons of wax concluded from Iran to Genoa, Italy.

Adrian Brown is a senior market analyst for chemicals and base oils with SSY Shipbrokers, London, can be reached at or +44 12 0750 7507. Information about SSY can be found at In the Houston office, Panos Giannoulis of SSY’s Chemical Tanker Department can be reached directly at or +1 (713) 652-270 and Jordi Maymi in Singapore can be reached at +65 6854 7127.

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