SSY Base Oil Shipping Report


The week was agonizingly slow in parts of Europe and Asia. The United States rush of last-minute fixing to Asia was insufficient to stop rates from sliding further, but the great clear-out of tonnage from the Gulf Coast might just have stopped the rot.

U.S. Gulf

In some ways, it has been an interesting week on the U.S. Gulf-to-Asia service. It turned out there was actually quite a lot of material available for August loading, with the catalyst being the freight market. Once freight reached a certain point in the low- to mid $40s per metric ton, the traders came out and booked large swathes of space. Now, there are just a few ships left with space, but they are battling to avoid these levels and have set their sights a little higher. It remains to be seen how successful they are. Looking further ahead, traders are already talking about September and October cargoes of ethanol, ethylene dichloride and styrene, and owners are responding with freight ideas in the $50s/t, seemingly a little more confident since there are no outsiders on the tonnage list at this stage.

The transatlantic eastbound route also had an interesting week. Traders had been angling for a rout, in much the same way as the U.S. Gulf-to-Far East market collapsed, but unlike Asia, demand to Europe is not currently focused on just a couple of spot core commodities, but it is wider, encompassing products such as monoethylene glycol, cumene, ethanol, methanol, vinyl acetate monomer, styrene, cyclohexane, acrylonitrile, phenol, used cooking oil methyl ester, ethylbenzene and vegetable oil. The regular owners, having a solid contractual base and being relatively free from large-scale competition from outsiders, were mostly able to fill up their ships without backing down too much on freight discussions. Indeed, one owner was able buck the trend and fixed 5,000 tons of ethylbenzene from the Mississippi at $80/t, a premium of around $20/t over other rates out of the Mississippi, but it was all a matter of timing. Base oil demand has quietened down this week.

In terms of demand, the U.S. Gulf to Caribbean market has produced more cargo than expected, although it still is not enough to absorb all the spot market players in the region. Until now, ships that have been scheduled into South America or the deep-Caribbean had been picking off cargoes as a way of delaying the ship. However, contractual volumes into South America are improving for the first half of September and this might just be enough to take away some of that competition. The base oils tender into Punta Cardon, Venezuela, is such an example. The main 18,000-ton cargo was booked on an outsider, while the remaining 7,000 tons also went on an outsider at a rate of $300,000.

Contractual demand to the east coast of South America is a touch stronger, and the ethanol business is starting to take off, with several cargoes booked and several more requirements pending. Rates have been in the region of $550,000 for 10,000 cubic meter cargoes. Methanol has been discussed into both Brazil and Argentina and there is some urea ammonia nitrate being fixed south as well. Some small base oil enquiries have been noted from the U.S. Gulf as well.

Rates to India and the Middle East Gulf have dipped a little due to some prompt space becoming available. It could even be possible to beat $70/t for 10,000-ton quantities from Houston to the west coast of India. However, base oil demand has retreated and that leaves mainly ethylene dichloride and ethanol as the outstanding possibilities.


It has been a week of mixed results for owners in the North Sea and Baltic region. Some ships are only open in September, but there are still a lot of August positions still to be covered. The small clean petroleum market is still in dire straits with a lot of prompt open tonnage. Core trades at the moment still seem to be gasoline-blending components. There have been a couple of substantial ethanol requirements recently, and a rash of pyrolysis gasoline, heart-cut benzene, ETBE, FAME and reformate requirements. Base oils continue to move down from the Baltic.

It was a week of contrasts on the southbound route into the Mediterranean. Some owners were looking for rates slightly higher than previous levels – i.e., in the high $50s and even low $60s/t for 4,000- to 5,000-ton parcels into Turkey, whereas others were happy enough to talk about mid- to high $40s/t. However, a couple more owners simply threw in the towel and accepted rates that have not been seen for more than 30 years.

Northbound rates have also fallen, but not to the same extent as the southbound leg. Aromatics in the amount of 6,000 tons from the west coast of Italy to Antwerp-Rotterdam-Amsterdam paid 36/t-37/t, a slight drop from usual levels, but 10,000 tons of aromatics from the Adriatic Sea to Antwerp-Rotterdam-Amsterdam went for just 30/t, which is well below usual levels. Elsewhere, 5,500 tons of easy chemicals from West Mediterranean to the east coast of the United Kingdom paid 25.50/t, which is a routine kind of figure. Pyrolysis gasoline has been the chief product this week, with multiple cargoes fixed from Lavera, France. Base oils are mostly term supply, although there is a possible cargo from the Black Sea to Rotterdam.

In contrast to most of the European routes, the West Mediterranean actually turned out to be tight on prompt space, and charterers had to pay premiums in order to encourage owners to ballast their ships in from northern Spain or even from the East Mediterranean. Base oils have been fairly prolific, with cargoes moving from Spain, Italy, Greece and the Black Sea.

Transatlantic westbound rates have deteriorated even further. Paraxylene in the amount of 5,000 tons was fixed from Rotterdam to the U.S. Atlantic Coast at barely $27/t, a level that has not been seen since 2009. Further cargoes of paraxylene were also booked, while a cargo of 20,000 tons of MTBE from Rotterdam to Houston obtained a reduction of more than $5/t from the previous shipment. Base oils in the amount of 3,000 tons from Antwerp to the U.S. Gulf were said to have been worked at around $50/t, and there have been a couple of small base oil enquiries in addition. Traders are also enquiring about sending base oils into the Caribbean from both Antwerp-Rotterdam-Amsterdam and the Black Sea.

It has been rather slow this week to Asia. Ships on berth in August just about managed to fill, but rates are competitive. Easy chemicals in the amount of 2,000 tons from Rotterdam, the Netherlands, to Ulsan, South Korea, for example, were reported to have gone in the high $70s/t. Base oils have not been active.

Not a great deal occurred on routes to India and the Middle East Gulf either, and a couple of ships still have space. Small parcels of base oil are still being quoted.


The overall impression of regional trade in Asia is one of continuing quietness which is manifested in the number of prompt ships that are roaming the domestic markets, keeping downwards pressure on rates all the time. A 5,000-ton aromatics load from Korea to mid China went in the mid-teens, and the same rate was agreed for 6,000 tons of clean petroleum from Korea to Japan. There has not been much happening southbound, but at least northbound has a number of requirements for paraxylene, mixed xylenes, benzene, pyrolysis gasoline, orthoxylene, paraffins, acrylates and vinyl acetate monomer. Base oil opportunities have been limited, however. Clean petroleum has enlivened the intra-Southeast Asia market, and so has a slightly more active palm oil market, which has caused a bit of tightness for prompt loading.

Export benzene has been active to the U.S. Gulf off late August and early September dates. Owners have been juggling cargoes, and sometimes reletting cargoes to each other in order to fill their ships. The upshot is that while space is tighter, benzene rates are still in the region of $40/t for 6,000-to 9,000-ton quantities. It is said that base oils may begin to move from Asia to Europe. A cargo of 6,000 tons was indeed booked from Singapore in the mid $70s/t, which is some $10/t higher than other recent fixtures. Loading base oils from Korea is untested so far, but rates would be expected to be in the region of $75/t-$80/t. Several smaller parcels of base oils to Turkey and Continental Europe are already being investigated.

After last weeks activity in India and the Middle East Gulf, things fell to the ground again, with relatively little happening in the regional markets. Some base oils are being marketed from the Red Sea, and there were a couple of tenders from Ruwais, United Arab Emirates. The earlier one is expected to end up in India while the later tender had seen traders talk about Turkey or Europe as a destination. Otherwise, larger lots of chemicals were missing from the eastbound route, with mostly small parcels seen on the westbound run.

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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