SSY Base Oil Shipping Report


The lack of prompt space in the U.S. Gulf has been a major cause of frustration for traders. Demand in Asia is starting to escalate on some routes, whereas Europe looks to be slightly quieter.

U.S. Gulf

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Prompt space to the Far East remains elusive, and those owners who managed to hold on to some space have been able to capitalize, with rates in the mid $80s per metric ton being achieved this week on 5,000-ton parcels from Houston to Yangtze. Much of March is already full, and traders are finding that they have to side-line many enquiries through lack of space. In the long run, this may end up eroding demand, but for now there are plenty of cargoes being shown around. Ethanol, styrene, cumene, phenol, aromatics, acrylonitrile, methanol and ethylene dichloride form the bulk of requirements. Base oils from Paulsboro have not as yet been fixed into Asia, though traders continue to seek out space.

Transatlantic eastbound routes give the appearance of being a little calmer, although in many cases that simply means that present plans for a lot of traders have been shelved until a wider, and therefore less expensive selection of space shows up. Ethanol continues to be discussed, along with cumene, caustic, biodiesel and acrylonitrile. Rates are static.

Space to India and the Middle East Gulf is tight too, thanks to a heavy volume of contractual material. Base oils rarely get mentioned these days, and instead there is ethylene dichloride and acrylonitrile. With little space available until the second half of March, rates are notionally unchanged.

The U.S. Gulf-to-Caribbean route is busy. There are several outstanding tenders for different grades of chemicals, as well as clean petroleum and some base oils. Rates are pretty firm in this region.

Space on routes to the east coast of South America for the first half of March is now starting to look quite tight after several weeks of new activity. Small parcels of base oil have been noted for Brazil and Argentina, but the bulk of the space has gone because of large cargoes of ethanol, caustic and paraxylene. Rates are stable at the moment but could lift if demand increases further.


The majority of vessels in the North Sea and Baltic region are reasonably well-employed. Bad weather in the region has caused inevitable cancellations which have benefitted those prompter positions. Base oils have been fairly busy, both from the Baltic and in and around the North Sea and freights have been firm. For example, 4,000 tons of base oils from the Baltic to the United Kingdom were heard to have gone in the mid $30s/t, for example.

The southbound market into the West Mediterranean has been reasonably busy, with things like the usual FAME, caustic, paraxylene, MTBE and styrene. There has not been that much going into the East Mediterranean, however. Base oils have been seen fixing Baltic to Morocco.

Northbound is not busy, but it is not quiet either. There are cargoes around, especially of aromatics and pyrolysis gasoline, as well as caustic, wax, gasoline components and vegetable oil. Rates are nothing fancy but everyone seems to be content.

Inter-Mediterranean trade has been very busy again in the West Mediterranean and several routine cargoes have been taking longer to fix than they would normally. FAME, of course, has to be the most active of products, but there have been plenty of alternatives – such as methanol, cumene, caustic, MTBE, aromatics and vegetable oil.

In the East Mediterranean, there have been a number of small parcels of chemicals and base oils, but space can be hard to find, especially given the unwillingness of Turkish owners to call at Russian ports. Ice has not been an issue in that area, and some ports have even been able to avoid imposing ice restrictions this winter.

The westbound transatlantic market has not been busy and a couple of prompt ships still have space, for which some very competitive rates could be achievable. Where loading dates are more critical, rates are mostly unchanged, giving rise to quite a wide range in numbers – low $30s/t for instance, on the very prompt space, yet $40/t could be payable for the same bit of business later on. Base oils have been slow, and instead the cargoes are of paraxylene, caustic, urea ammonia nitrate, acetone etc.

For traffic from Europe to the Far East, February is a closed book, and all the space has gone. Gaps can still be found in March, but there is continued interest in bigger lots of methanol, as well as styrene, orthoxylene, oxo-alcohols, acetone and propylene glycol. Base oil enquiries to China or Singapore are still aired but nothing seems to have fixed. Rates are unchanged again.

Demand to India and the Middle East Gulf is still pretty strong and several prompt requirements of aromatics and solvents have exceeded the rates paid last time. Acids and vegetable oils out of the Mediterranean and Black Sea to India have removed a number of potential candidates, with the vegetable oils paying anywhere from low $50s/t to mid $60s/t. Space is tight, although a 10,000-ton slug of ethylene dichloride to India may bring on additional tonnage and create some space opportunities. Some small lots of base oil have been tentatively looking out of the Black Sea to India and the Middle East Gulf.


Some domestic Asia routes have become very active following the Chinese New Year period. Intra-Far East, for example, is extremely tight on prompt space. There are plenty of requirements of aromatics in the 5,000-10,000 tons bracket, the rates for which have risen. Parcels of 5,000 tons from Korea to China are now paying low $20s/t, compared to the mid-teens at the end of January.

Northbound is also looking busier with a wider selection of cargoes, whereas southbound is still soft and intra-Southeast Asia is still struggling with the amount of open space following the collapse of the palm oil export market. The number of new base oil requirements is slowly rising but has still to reach the pre-holiday level.

Transpacific export routes are largely quiet. Only a little benzene is being attempted, with rates in the mid $40s/t for 5,000-ton parcels from Korea to Houston. Asia-to-Europe trades are not that busy either, although this does mean that owners are reluctant to go on berth and thereby those ships that do get fixed managed to preserve the usual rate levels. It is really only from Singapore and the Straits that there is a substantial overhang of space and that is causing freight to remain in the mid $70s/t for 5,000-ton parcels. A small amount of base oil is looking to ship back from this area to Europe at the moment.

Regional trades in India and the Middle East Gulf are still fairly busy, with parcels of caustic, benzene, paraffins, canola, methanol, clean petroleum, acids, paraxylene and some base oil. The base oil is mostly from the Middle East Gulf, although a parcel has been seen out of Karachi recently for prompt loading.

On eastbound routes, there have been a number of paraxylene possibilities, as well as methanol, glycols, ethylene dichloride and styrene, but volumes have not been particularly heavy and so rates have weakened further.

Westbound rates have not changed much, if at all, with a steady progression of enquiries. Space is not that plentiful either. Traders continue to toy with Iranian material, including base oils, but nothing new has been heard fixed so far.

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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