SSY Base Oil Shipping Report


Activity has been subdued in most main shipping hubs, causing some ship owners to hope that business returns to normal once the uncertainty over the United States presidential elections comes to an end.

U.S. Gulf

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Traders still maintain that freight levels are too high on the Far East route, whereas ship owners remain convinced that there will be an increase in demand over the next couple of weeks and therefore they are clinging to rates that are still in the $50s per metric ton. There is unfortunately for them quite a bit of November space remaining, while it seem that traders are casting ahead even further into December with their requirements of ethylene dichloride, styrene, ethanol and glycols. Surely there is still time for November requirements to appear, in which case they will have made the right call, but if that demand flags for any length of time it will probably consign freight back into the $40s/t.

Transatlantic eastbound is still one of the weakest routes around. Styrene simply does not work while cumene and phenol appear to be on hold. Instead, there has been a small amount of glycol, acrylonitrile, cyclohexane and vinyl acetate monomer fixed out of the U.S. Gulf, as well as cargoes of biodiesel from the U.S. Atlantic Coast. Rates are in the low- to mid $40s/t currently for 5,000-ton parcels. There has been no more talk of base oils this week.

There is a reasonable amount of demand in the U.S. Gulf-to-Caribbean market, but at the same time the number of ships available has more than kept pace. Occasionally, owners have found that they may have the only ship available on a certain set of dates, in which case they are able to squeeze a little harder, as happened with the 5,000 tons of ethanol from the U.S. Gulf to the east coast of Mexico that ended up paying $28/t. But these kinds of parcels rarely pay above $25/t, and can even fetch rates in the low $20s/t. Base oils have been moving to usual destinations, plus the 15,000 tons that was looking to move from the U.S. Gulf to Punta Cardon, Venezuela, ended up going on in-house tonnage.

Ethanol has turned out to be the mainstay of the route to the east coast of South America, but rates are hugely unattractive to ship owners – the last couple of 10,000- to 15,000-ton lots ended up going to a couple of ports in northern Brazil in the $35/t-$37/t vicinity. Base oils are being attempted from the U.S. Gulf into Brazil currently.

The market is fairly active in the direction of India and the Middle East Gulf, which means that there is not a lot of second half of November space left, although more ships may be introduced if the route into Asia continues to perform poorly. Ethanol is still top dog, with several cargoes being worked. Base oils have also had some traction, both from the U.S. Gulf and from U.S. Atlantic Coast. Up to 10,000 tons of base oils are claimed to have fixed from Paulsboro, U.S., to Mumbai, India, in the $70s/t, for example.


Owners have classified trade in the North Sea and Baltic region this past week as totally unsatisfactory. Around 60 percent to 70 percent of all demand is comprised of biodiesel or ethanol, with customary grades side-lined. Even base oils have been slower this week. Public holidays and industry events within Europe may be partly to blame, but many are hoping that the current cold spell will generate more demand from the oil sector and thereby ease the pressure on the few chemicals and speciality products quoted.

On southbound routes, it has been a quieter week overall. A few requirements are still outstanding from the previous week, but the majority have either been booked or put on hold. The latest 6,000 tons of paraxylene from Rotterdam, the Netherlands, to Iskenderun, Turkey, ended up in the very high $30s/t again, copying the last couple of fixtures. It transpires that the usual supply source for Iskenderun is the paraxylene unit in Israel, but this is down currently and while it remains down there will be further shipments from Rotterdam.

Northbound demand has been feeble and owners have been unable to maintain their freight ideas. Aromatics in the amount of 6,000 tons from Priolo, Italy, to Antwerp-Rotterdam-Amsterdam saw a number of owners offering rates in the $32/t-$34/t region, but charterers were countering at just 23/t-24/t. The usual 6,000 tons of base oils from Italy to northern France and Rotterdam seems to be unfixed, however.

Inter-Mediterranean owners are still struggling to employ all the ships that are trading within the Mediterranean this week, and a number have been unable to find anything really constructive to take all week. A haul of 2,000 tons of styrene from Tarragona, Spain, to Derince, Turkey, was worked at just $78,000, and even then the deal could not be finalized. A FAME cargo of 5,000 tons from Monopoli, Italy, to Barcelona, Spain, allegedly had seven owners interested, even though the cargo was being marketed with freight ideas of just 18/t. Base oils have been reasonably busy again into the usual destinations of Turkey and North Africa.

Transatlantic westbound trade has been reasonably active in terms of enquiry, with traders looking at benzene, paraxylene, mixed xylenes and pyrolysis gasoline. Most owners are taking a fairly relaxed view of the market, but there are a couple who seem concerned about being left high and dry and who have been offering at very competitive levels. Paraxylene in the amount of 5,000 tons from Rotterdam to the east coast of Mexico, for example, ended up in the low $30s/t, whereas a cargo of 7,000 tons of pyrolysis gasoline from Fawley, U.K., to the U.S. Gulf failed to find an attractive number and the cargo has had to be reissued. Base oils are not happening right now.

It is interesting to see that bit by bit, scheduled owners on routes to the Far East have covered much of the open space in November, but in such a way that there was no room for an outsider to come on berth. Many of the parcels have been small, 1,000-ton lots, which have been paying in the $120s/t-$130s/t, so the net results have been positive for the owners. This route is bereft of base oils, though.

A new wave of demand blew in the India and the Middle East Gulf region and owners have been kept busy working on some of the combinations. Products such as solvent naphtha C9, solvent naphtha, mixed xylenes, acrylonitrile, glycol ethers, ethylene dichloride, toluene, acetone, phosphoric acid and vegetable oil have been seen. Base oils have also been pretty active.


There are some who feel that the Northeast Asia market has made a U-turn. They believe that demand has faltered, causing a lot of ships to become open in prompt positions and resulting in subsided freight levels. Others, however, see this area differently – perceiving plenty of cargoes and an ongoing trend of firm rates. There are certainly a number of base oil cargoes in and around the region, although again, most are small lots, suggesting buyers are taking little but often, perhaps unsure of the longer-term direction base oil prices will take. In Southeast Asia, an increasing number of vessels are turning away from chemicals and base oils and are chasing either palm oils – which are yielding rates in the high $20s, and sometimes low- to mid $30s/t to India – or clean petroleum, which is seasonally more active.

The transpacific export market is not that bright presently. Benzene demand has melted away right now, and there are several ships still with November space. Yet despite this, owners continue to ask for rates in the mid $40s/t for 6,000-ton parcels from Korea to the U.S. Gulf and low $40s/t for 9,000-ton lots. It is a similar picture on the route to Europe. Again, several ships seemingly have November space but owners are looking for rates in the $80s/t and $90s/t for 3,000-ton parcels from Korea to Antwerp-Rotterdam-Amsterdam. Base oils in the amount of 7,000 tons from Ulsan, South Korea, to Antwerp were apparently fixed in the mid $70s/t.

There is a lot going on in the India and the Middle East Gulf regional markets, with plenty of cargoes quoted throughout the areas. Several cargoes have been quoted around for the entire week without being covered. Owners do not seem to want to linger in the region after discharging, and many end up ballasting back to Asia to take advantage of the stronger palm oil market. On the eastbound route, the latest 10,000-ton paraxylene cargo from Mangalore, India, to Southeast Asia ended up paying $25/t, which represents a slight increase on the previous shipment.

Westbound is also producing some slightly higher levels, even though the market ostensibly looks quiet. Aromatics totalling between 16,000 and 17,000 tons from Al Jubail, Saudi Arabia, to Antwerp-Rotterdam-Amsterdam, supposedly fixed in the low $50s/t – which is perhaps up a notch.

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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