SSY Base Oil Shipping Report


Talk of a recovery turned out to be premature as all routes globally turned to ice this week. Such is the state of global trading these days that even minor shifts in feedstock pricing create substantial ripples further down the line that can bring the shipping market to an abrupt stop.

U.S. Gulf

Among Far East routes, styrene was tried into Asia, but became a bit of a no-show when it became apparent there was hardly any surplus styrene in the U.S. Gulf for October. Asian prices were also receding, making it too risky to proceed. Several large lots of ethanol and methanol were noted, and there was talk of ethylene dichloride, phenol and acrylonitrile. However, paraxylene bit the dust, at least for now due to alleged oversupply in Asia. Base oil remains on the side-lines too. October space is available, but it would only take a rally of just one type of chemical to deplete the last bits of space. Meantime, rates remain notionally unchanged.

It has been another quiet week eastbound, and rates are starting to droop, in spite of reasonably solid contractual nominations. Again, most of the fixtures this week have been of unconventional grades and mostly in larger sizes, such as urea ammonia nitrate, tall oil, technical corn oil and methanol. Base oils have been present, but as contractual shipments mainly.

To some, the route into the Carribean is perceived as being quiet with a decent amount of open space available. New tenders for base oil into Punta Cardon for October and November could liven things up a bit. Apart from that, there has been a medley of caustic, sulphuric acid, linear alkyl benzene, styrene, acetone and MTBE quoted.

Contractual volumes dominate the route to the east coast of South America currently, with the occasional spot market requirement. As with many of the other routes out of the U.S. Gulf, rates are mostly unchanged, although there is the odd prompt ship around that could be persuaded to accept a lower number.

Among trade into the India and Middle East Gulf region, there seems to be plenty of October space around among the trio of scheduled carriers, with $60 per metric ton now on the table for 10,000-ton parcels from the U.S. Gulf to Indias west coast.


Among North Sea and Baltic activity, the end of the month brought forth a number of new requirements, as is often the case, but the amount of new business has been disappointingly low and there are still some prompt ships around. The EPCA event takes place later this week in Budapest, and while it is on, the market becomes notoriously quiet, and is therefore an inducement to ensure ships are not idle over this period. A little more base oil has been worked from the Baltic to Europeans destinations this week.

Overall volumes on southbound routes are still lower than what would be expected at the time of year, especially as Turkey should be fired up about restocking, following the long Kurban Bayrami holiday. Only one cargo of styrene seems to have been booked there this week. Fatty acid methyl ester, MTBE and methanol were among the larger requirements. Again, base oils were term supply only.

On northbound routes, one of the main talking points this week is the enquiry to ship 12,500 tons of base oils from Augusta to Rotterdam instead of the usual 5,000 to 7,000 tons. Otherwise, pyrolysis gasoline has stirred up some interest among traders, but precious little else.

It has been another bland week in inter-Mediterranean activity, with only a mild increase in demand from Turkey and North Africa. Some base oils have been done, from Greece to Turkey for example, and there are supposed to have been some shipments from Spain into North Africa. Owners are finding fatty acid methyl ester to be one of the few consistent cargoes these days, and the beauty of the chemical is that it can load in one port, discharge in another and then reload at the same port and go back again, cutting out ballast trips and waiting time.

Any recovery on the westbound transatlantic route has been short-lived, with most of the potential cargoes getting ditched this week. Firstly benzene, which is still tight in the U.S. Gulf was discarded, then toluene got put on hold. Mixed xylenes died away with lower values in the U.S. Gulf. Paraxylene is still around, but in minor quantities only. Perhaps a little heartening has been some caustic movements, but this is supposed to be in tight supply in Europe so may now be exhausted. MTBE, sulphuric acid, cumene and urea ammonia nitrate are left, which is hardly the stuff of dreams for ship owners, with very low rates associated with the larger requirements. Base oils have been represented by traders looking to send small volumes across to Rio Haina.

On routes from Europe to the Far East, demand for products such as styrene, toluene and mixed xylenes have faded after only a few cargoes were actually booked. Prompt space is very scarce, but there will be more space around later in October. Traders have been checking rates on base oil to Asia, and the 4,000t from Antwerp to China is believed to have gone in the region of $90-95/t.

Whilst it has been reasonably busy on the route from Europe to India and the Middle East gulf, the space situation is overwhelming, with plenty of ships already on berth and looking to fill out. Rates are therefore under even more pressure, with levels in the low $60s/t even possible for specific loading dates. Base oils are still under consideration, as are cargoes of ethylene dichloride and acrylonitrile. Phosphoric acid too is a bit busier.


In domestic Asia trade, space is considerably tighter on intra-Far East routes up to the middle of October, at least among small tankers, and rates on some parcels have increased. There are still several larger units around however that are open in prompt positions, where rates are unchanged. Small lots of base oil are dotted around Asia, but most are either repetitive shipments or are traders toying with possibilities which have still to develop. Further port closures and subsequent shipping delays can be expected with Typhoon Megi coming ashore this week in Taiwan.

Almost all the space for first half of October on the Transpacific route has been filled. Benzene seems to be the primary commodity for export, with only the occasional discussion about paraxylene, mixed xylenes and cyclohexane. Second half October space is still obtainable, but some owners would rather take palm oil to the United States than aromatics or base oils, for example.

Freight levels are still unchanged, at around $40-$42/t for 5,000 ton parcels to Houston. Owners are reporting increased demand for chemicals to Europe, in particular specialty products such as acetates, acetic acid and thermal phosphoric acid. For example, 5,000 tons of acid from China to Spain is reported to have been booked at around $105/t. Large cargoes of palm oil from Malacca Straits to Rotterdam are paying around $40/t, yet in spite of this a cargo of 28,700 tons of base oils was booked from Singapore to Rotterdam at a rate said to be in the high $30s/t.

The India and Middle East Gulf regional trade market is described as more upbeat, with a wider range of chemicals, clean petroleum and acids being seen. An Iranian cargo of base oils is believed to have been fixed into India, the first such cargo for a while, whereas most other base oils have been from either Ruwais or the Red Sea ports of Jeddah and Yanbu. Eastbound is not particularly busy, with most requirements being for small parcels, with only the occasional larger lot over 10,000 tons. Westbound is also quiet. Several Mediterranean-based vessels have ended up booking methanol from Iran back into the Mediterranean again.

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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