SSY Base Oil Shipping Report


No region is very active presently. Prospects are rosier in the U.S. than in Europe, but both these markets look better than Asia right now.

U.S. Gulf

Demand to the Far East has been gradually building over the past week or so, but the amount of open tonnage is increasing too, with several ships that need to be repositioned back to Asia making an appearance. Rates are, therefore, under pressure, with 5,000-ton parcels from Houston, U.S. to Korea seeing levels between $52 and $55 per metric ton. Styrene is most certainly on the cards. Paraxylene, ethylene dichloride, ethanol and phenol are all receiving attention. Base oils are being quoted, but almost always for inventory purposes rather than for spot sales to third-party customers.

Most of the space eastbound along the transatlantic route is being taken up with contractual demand. Spot demand is reasonably active so rates are holding at present levels, which are in the high $40s/t or low $50s/t for 5,000-ton parcels from Houston to Rotterdam, Netherlands. Some styrene is being investigated, and there are several parcels of cumene, phenol, cyclohexane, glycol and biodiesel still to be shipped. Base oils are infrequent and mostly term supply.

There has been a reasonable amount of demand from the Caribbean over the past week or two, yet there is always some prompt space available, without which rates would surely have risen. Base oils are not that visible with much of the demand comprised of caustic, acid, ethanol, vegetable oil and clean petroleum.

If it were not for ethanol, the route to the east coast of South America would be rather slow. But with a lot of ethanol being shipped with occasional paraxylene, caustic and styrene requirements, ships are pretty well able to fill and rates remain in the low- to mid $50s/t for 5,000-ton parcels from Houston to Santos, Brazil.

The route into India and the Middle East has been one of the quieter routes out of the U.S. Gulf. Ethanol has slowed to India, although there are some fresh requirements into the Middle East Gulf. Ethylene dichloride has also gone slowly, with traders able to place the material into the Mediterranean or Asia as well as India. Base oils have flattened too, perhaps because of tight supplies. Since there are still several ships with space to fill, rates are therefore starting to drift downwards.


Activity along the North Sea and Baltic route over the past week or two has been heavily influenced by the Easter holidays as many have taken time off. Things are slowly starting to rebuild and the number of prompt ships is starting to thin, but right now rates are still pretty weak. Base oils were perversely a bit busier during the holiday period, with a fair number of spot deals, but the past few days have seen hardly any new business quoted.

There is not a great deal of open space among the regular carriers southbound, but if the North Sea should remain slow, there is a chance that some operators may swing tonnage into the Mediterranean. At least one shipment of base oils, from the United Kingdom to Vado Ligure, Italy, has been booked in such a fashion. There are a couple of further spot base oil requirements pending into the Mediterranean as well as the usual mix of styrene, paraxylene, ethanol, methanol, caustic, methyl tertiarybutyl ether and biodiesel.

Business is a little slow northbound presently. Biodiesel in the amount of 5,000 tons from Ravenna, Italy to Rouen, France was reportedly booked at $42/t, and, if confirmed, would represent a highly competitive number. Among the cargoes of vegetable oil, ETBE, methanol and alkylate there has been an enquiry to ship 8,500 tons of base oils from Cartagena, Spain, to Rotterdam.

A few more ships have found themselves in open positions along the inter-Mediterranean route during the past week due to the slowdown in trade over the holiday period. Business may reactivate for a while, but May 1 is a major holiday throughout Europe along with plenty more public holidays in May. Historically, it is a disjointed month and business usually fails to find its rhythm. Base oil has been fairly active this month in the Mediterranean, with a number of spot deals from Spains Cartagena and Algeciras ports; Livorno, Italy; and Aghio, Greece.

Along the transatlantic route, freight levels have been trending downwards over the past couple of weeks, with fewer spot requirements yet plenty of scheduled and unscheduled space. Paraxylene in the amount of 5,000 tons from Rotterdam to the U.S. Atlantic Coast just concluded at $39/t, a drop of $5/t-$6/t from the previous fixture. Base oil flows have slowed a lot, but are not unique on this route right now.

There is not a great deal of space to the Far East left for May, and several outsiders are looking to capitalize on the situation and go on berth. Several traders are talking of styrene, and phenol has been noted after a long absence. Mixed xylenes are under discussion and paraxylene is known to have been fixed. Base oils have been quoted into Singapore, and have been around for a couple of weeks without getting fixed. Rates are still fundamentally in the mid $80s/t for 5,000-ton parcels from Rotterdam to Korea or mid China.

Space is still tight to India and the Middle East Gulf and freight rates are firm. Aromatics in the amount of 5,000 tons from Leixoes, Portugal, to the west coast of India and Pakistan are being talked in the upper $80s and low $90s/t. Vegetable oil and acids continue to absorb a lot of tonnage, and rates are strong, particularly for vegetable oil. A couple of base oil traders have made noise about sending material to India and the Middle East Gulf, but aside from oil majors, nothing much has materialized recently.


It has been a painful couple of weeks for most owners trading within Asia. Business is slow and the number of ships that still have to cover the last few days in April is significant. Rates are very competitive on the whole. Base oil requirements are mostly small, and it is rare to find a cargo greater than 3,000 tons, with many being less than 1,000 tons. Extensive public holidays within the region may be partly to blame and perhaps volumes will increase, but owners are not hugely optimistic. Traders may also be biding their time until after May 1 when it is reported that Chinese authorities will introduce a new severe consumption tax on imports of mixed aromatics and light cycle oil. That in turn could open opportunities to sell alternative products such as mixed xylenes and toluene, but not much will happen until the situation is clarified..

Things are rather messy on the transpacific export route. A couple of benzene possibilities have been seen to the U.S. Gulf for May. Generally, owners are still looking for levels in the high $30sor low $40s/t. Something lower was done, but there were special circumstances to that deal. Other requirements include acetone, vinyl acetate monomer and orthoxylene. Scheduled space is still scarce to Europe, but rates have yet to strengthen. Most parcels are under 2,000 tons, which attract offers anywhere from the $90s to $130s/t, depending upon factors such as cargo size, dates and ports involved.

The market is a little more subdued into India and the Middle East Gulf this week, with fewer requirements around. Some Iranian base oils have been booked into India, and a few spot quotations have been seen within the region. Base oils from Al Ruwais, U.A.E.; Sitra, Bahrain; and Yanbu-Jeddah, Saudi Arabia have also come onto the market.

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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