SSY Base Oil Shipping Report


The legacy of lower crude and feedstocks pricing continues to gnaw away at the shipping market. China in particular has decided it has adequate inventory and has cut back on further imports, and the other markets such as Europe and the U.S. are now trying to adjust.

U.S. Gulf

It has been a quiet week along the U.S. Gulf to Far East route, partly because of the lack of interest from Asian buyers but also because the American Fuel and Petrochemical Manufacturers annual meeting is about to commence in San Antonio, Texas, and many in the industry are setting off on their travels.

Ethylene dichloride, ethanol and paraxylene are the primary spot cargoes at the moment, the rates for which are in the high $70s and low $80s per metric ton on the basis of 10,000 tons, but always to outports.

Rates to mainport destinations are notional, but chances are owners with ships scheduled for April will be feeling a little nervous. Base oils rumble on, with talk of small lots to outports in Southeast Asia, and a further 9,000 tons to go to Singapore in April.

There is no definitive flow of any particular commodity along the transatlantic route these days, and instead there is a diverse range of products such as biodiesel, ethylbenzene, caustic, ethanol, turpentine, fish oil, acrylonitrile, glycol, vegetable oil and cumene. Rates are broadly unchanged. There is not much base oil interest currently, but numbers would work out to be in the mid $70s/t for a 3,000-ton parcel to Antwerp-Rotterdam-Amsterdam from the U.S. Atlantic Coast.

It has been fairly busy into the Caribbean and Mexico this week. Base oils are represented through tenders into Rio Haina, Dominican Republic, and Cartagena, Colombia. Caustic has seen some action. There is a new ethanol tender into Jamaica, and styrene and glycols for Mexico and a requirement for 8,400 tons of sulphuric acid into Venezuela that has traders checking all possible loadports, including from Europe.

Activity has been muted into the east coast of South America this week. The latest caustic requirement into Munguba, Brazil, is being worked with material out of Maceio, Brazil, this time. A couple of small parcels of acetone were booked into Aratu, Brazil, and the next large cargo of urea ammonia nitrate into Argentina is being lined up out of the Mississippi River. Following the fixture of 6,200 tons of base oils from Houston and Port Arthur into Brazil in the high $50s/t, there is not much else in terms of new base oil activity.

Traders are looking to move base oils from both Paulsboro, U.S., and the U.S. Gulf into India. Several large slugs of ethanol to India are under discussion, and there is still a possibility to ship 10,000 tons of methanol into India from the Caribbean, should issues about product supply be resolved.


There is little new by way of base oil exports from the Baltic this week. Indeed, apart from a handful of term supply shipments, there has not been much base oil throughout the North Sea and Baltic Sea regions. It appears that most suppliers have very few spot barrels left for sale until later in April. Vessels are reasonably well booked, with perhaps a week or so of forward employment. There have also been a few early signs that the driving season is getting closer, with more ethanol, biodiesel, ETBE and MTBE and other types of gasoline blendstocks quoted around.

It has been quite busy southbound into the Mediterranean this week. Rates have responded too, with small increases noted. Biodiesel is one of the busier products, and there has been styrene, wax, ethylene dichloride, acrylonitrile, paraxylene and methanol quoted. Most of the base oil shipments that are taking place are for contractual partners and are not really spot volumes.

Northbound demand is strong and freight rates are firm. Base oils in the amount of 3,000 tons from Leixoes, Portugal, to are rumored to have gone at $40/t, when a more normal level would be between $25/t and $30/t. Reformate in the amount of 5,000 tons from Lavera, France, to Antwerp-Rotterdam-Amsterdam seemingly collected 31/t-32/t. A 10,000-ton cargo of pyrolysis gasoline from two ports I Italy to three ports in Antwerp-Rotterdam-Amsterdam concluded at 43/t. An 8,000-ton load of base oils from Italy to Rotterdam was said to have fetched $30/t, which is a little higher than normal.

It is perhaps still possible to find the occasional prompt ship in the Mediterranean, but generally owners seem to be well employed. Bad weather has caused some of the tightness, but an increase in demand is the main culprit. Several plants that have been off-line for a considerable length of time are starting to come back up, namely caustic production in Lavera, France; methanol in Libya; methanol in the Black Sea; and aromatics from Haifa, Israel. Moreover, April 1 is the date on which the Russian river system opens and that will draw away a veritable armada of ships that have been performing many of the vegetable oil voyages within the Mediterranean.

A lot of trader business along the transatlantic route has fallen by the wayside as oil prices have tumbled. Products such as pyrolysis gasoline are now rare. There are some possibilities to ship mixed xylenes and toluene, and a benzene cargo was noted from Skikda, Algeria, though that particular cargo will likely remain in Europe. Base oil activity is confined to small parcels at this stage. Freight levels are slipping, and with the AFPM meeting taking place ,it may mean that numbers dip further.

There is not a great deal of scheduled tonnage on berth and consequently an outsider was enlisted to take 20,000 tons of hydrocracker bottoms to Korea, seemingly for a level in the $80s/t. Another outsider was working a combination of 8,500 tons of chemicals and base oils from Antwerp-Rotterdam-Amsterdam and the Mediterranean to Singapore and China, with levels around $1.2 million mentioned.

However, more April space is starting to appear, and whilst scheduled owners believe levels should be $85/t-$95/t for 5,000-ton parcels, there is an outsider now willing to undercut these rates. Several small lots of base oil have been booked but with less product availability in Europe and with demand from China starting to shrink the period of the big base oil fixtures may be at an end.

Base oils are active along the India and Middle East Gulf route. It has been suggested that another 8,000 tons of base oils may have been booked from Kavkaz, Russia, into India and another 6,500 tons fixed from Italy to the United Arab Emirates. Further enquiries have been noted into Karachi, Pakistan; Aqaba and Yanbu in Saudi Arabia; Jebel Ali, United Arab Emirates; and Mumbai, India. On top of all this, there has been good demand from the chemicals sector, although this is enticing more vessels to consider going on berth and thereby stunting any growth in freight rates.


A couple of the local markets have been suffering from the withdrawal of Chinese buyers from certain commodities. Most notable is the intra-Far East route, although even here most smaller ships already have a program which takes them into April, and which has meant that some cargo enquiries have been repeated daily in an attempt to attract offers.

Southbound demand does not amount to much, especially for April, keeping rates soft. Northbound, however, has become busier, with requirements such as MTBE, paraxylene, orthoxylene, vinyl acetate monomer, acetone, sulphuric acid, fatty alcohol, benzene, toluene and of course base oil. Rates look to have inched up slightly. The intra-Southeast Asia market has been rocked by a bribery scandal which could possibly see some changes in the composition of the local fleet there, depending upon how suppliers and receivers react.

It has been fairly quiet on the transpacific east route, with just talk of MTBE to the U.S., but no benzene so far. Space is a bit tighter all the same, and 5,000 tons of pyrolysis gasoline from Singapore to Mississippi, U.S., was worked in the mid $90s/t. There has been no great change to the market to Europe. Space remains limited so far. Chemicals in the ballpark of 3,000 tons from Jiangyin, China, to were worked at $95/t, and another 2,000 tons of butac looks to have fixed from Zhapu, China to Gebze, Turkey. Traders have been looking at orthoxylene and acrylonitrile into the Mediterranean, and 1,000 tons of dicylcopentadiene from Mailiao, Taiwan, to Antwerp remains uncovered.

There are still a lot of cargoes quoted on the regional markets along the India and Middle East Gulf route. Clean petroleum has been especially busy. Theres been movement in Indian coastal markets as well as out of the Red Sea for cargo such as glycol, paraxylene and base oils. There are still not many Iranian base oils being marketed, possibly because of the New Year holiday in Iran, but also because commodity pricing is an issue.

Eastbound business is not that exciting. A few Iranian possibilities of methanol, paraxylene and styrene have been noted, along with the usual paraxylene and benzene cargoes from Mangalore, India, and Sikka, India. Some chemicals requirements have been seen out of Al Jubail, Saudi Arabia, but congestion there remains fearsome.

The westbound markets remain stable, with rates generally quoted close to last-done. There are, however, a couple of ships with part-cargo space and they may be relied upon to provide some discounts. A couple of base oil enquiries have been quoted into Turkey from Iran, but it remains to be seen whether they get fixed or not.

Adrian Brown is a senior market analyst for chemicals and base oils with SSY Shipbrokers, London, can be reached atfix@ssychems.comor +44 12 0750 7507. Information about SSY can be found In the Houston office,Steve Rosenthalof SSY’s Chemical Tanker Department can be reached directly at +1 (713) 652-2700 and Jordi Maymi in Singapore can be reached at +65 6854-7127.

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