SSY Base Oil Shipping Report


Several routes out of the U.S. Gulf and Europe are reported to be progressing quite nicely with a reasonable amount of demand coming through. Asia is starting to come under the influence of the lunar holidays, and demand is dropping off quickly.

U.S. Gulf

There will come a point soon in which it will be hard to conclude business on the route to the Far East, since much of Asia will close down for the Chinese New Year celebrations. Right now, however, there is still time to book cargoes and there is a lot being quoted. Base oils have been detected this week, with traders looking at 5,000- to 10,000-ton quantities. Some in-house base oil shipments have been detected too. Rates are looking firm for January loading, but there are still ships around for February at this stage. Lots of around 5,000 tons to Korea are in the upper $50s to low $60s per metric ton range. Products include ethylene dichloride, methanol, ethanol, styrene, phenol, cumene, adiponitrile, acrylonitrile, acetone, glycols and cyclohexanone.

Rates are a little stronger on the eastbound route. For example, 5,000 tons of monoethylene glycol from Port Neches in the United States to Antwerp, Belgium, concluded in the high $50s/t. There is not much in the base oil line, but there are certainly possibilities for cumene, styrene, phenol, vegetable oil and biodiesel.

U.S. Gulf to Caribbean trade has been quite lively at times, especially into Venezuela right now. Cargoes of caustic, sulphuric acid, orthoxylene, mixed xylenes, cyclohexane and olefins have been noted too. There is still some space available for the second half of January, but the biggest threat to whether a cargo moves or not is fog. Fog has been present most days in the Houston Ship Channel, with anything from 10 up to 30 ships queuing at any one time, whether inbound or outbound.

January space to the east coast of South America is a little tight currently, with a large number of vessels filling out on ethanol cargoes into northern Brazil. There have been some small parcels of base oil waiting their turn to be fixed, and traders have been looking at paraxylene and caustic too. A 1,400-ton parcel of acetone was worked from Texas City, U.S., to Aratu, Brazil, at around $93/t, but it is believed that the deal has not yet finalized. Paraxylene in the amount of 8,000 tons from the U.S. Gulf to Suape, Brazil, fetched high $40s/t.

As expected, ethylene dichloride has been busier into India. Base oils are also still pretty busy, while a 30,000-ton cargo of ethanol is reputed to have fixed into India at U.S. $1.6 million. There is not much space around for January cargoes.


North Sea and Baltic activity levels have stepped up a notch and there have been occasions over the past week when prompt space has been scarce, which has sometimes entailed charterers modifying their preferred loading dates in order to draw in more interest from owners. Several cargoes have been requoted too, which is a sign that owners are more relaxed. Unusually, it has been the gasoline components and biodiesel cargoes that have been most prominent, but this does reflect the higher prices that have been achieved for these products through heightened demand. Base oils have been a little lethargic out of the Baltic, but it seems that material is being accumulated for shipment to West Africa instead.

The market into the Mediterranean remains fairly busy, yet paradoxically, rates on some cargoes have actually declined. Moreover, space is relatively tight but it seems that some owners are uncomfortable holding onto that space. Paraxylene in the amount of 6,000 tons from Rotterdam, the Netherlands, to Iskenderun, Turkey, for example was heard to have fixed at $35/t, which is quite a bit lower than the previous time. Base oils have been fixed, but mostly by majors supplying term customers. Base oils in the amount of 2,400 tons from the United Kingdom to Alexandria, Egypt, are said to have achieved a level of around $66/t-$67/t, which is very competitive.

The northbound market is reasonably active and occasionally stronger rates have been reported – 4,500 tons base oils Italy to Rotterdam seemingly attained a level of around $45/t. Ten thousand tons of benzene, toulene, and xylene from Italy to Antwerp-Rotterdam-Amsterdam went in the low 30s/t and 2,200 tons of acetic acid from the Black Sea to Spain and Antwerp cost around $85/t.

Almost everyone who follows the Inter-Mediterranean market has remarked how busy it has been in the West Mediterranean, with prompt space almost non-existent, yet in spite of all this, virtually every fixture was heard done at a lower level than before. Biodiesel has been the main grade in the West Mediterranean, while vegetable oil has been fairly busy out of the Black Sea. Ice is being reported in some Black Sea ports, but the forecast is for milder weather to come, in which case the recently announced ice campaigns may be withdrawn.

Transatlantic demand has been steady westbound, with traders booking at parcels of pyrolysis gasoline, toluene and paraxylene. Some of the paraxylene has been destined for Mexico while others have looked at Cooper River in the U.S. Rates have been in the low to mid $40s/t for 5,000-ton parcels to Cooper River, and 4,000 tons of solvents from Antwerp-Rotterdam-Amsterdam to the U.S. Gulf paid the same kind of figure, but there is not a great deal of January space remaining. Some large cargoes of sulphuric acid and MTBE which have been quoted might attract more space on berth, however.

Europe to Far East business has begun to tail off as the Chinese New Year has come closer. Traders, however, feel that there will still be some positive demand for styrene, paraxylene and mixed xylenes after the holidays. Bright stock demand continues, and several parcels have been attempted.

January space is very scarce from Continental Europe to India and the Middle East Gulf, although there are still some ships that have spare tanks out of the Mediterranean. Rates have been rising quickly, with some owners seeking rates in the $80s/t and $90s/t for 5,000-ton parcels out of Rotterdam. Aromatics, solvents and base oils are the main commodities in contention, with some smaller parcels of speciality grades in addition.


Regional trade has slowed considerably over the past few days. Even the intra-Far East market, which less than a week ago was full of quotes for cargoes of paraxylene, benzene, toluene, mixed xylenes, glycols, phenol, acetone, light cycle oil and base oil has suddenly gone quiet. For owners, the critical period seems to be Jan. 20-30, with quite some open space still being shown for this period. Many of the cargoes that had been quoted until recently are probably unfixed, and will need to be covered after the holidays, but this is of little consolation to these owners, some of whom are likely to send their ships in ballast southwards since the effects of the lunar holidays are not so prolonged down there. The effect of this could mean that the Northeast Asia market will be very short of space following the holidays, especially if the process of restocking starts in earnest soon thereafter. It could also mean that there should be plenty of ships around for intra-Southeast Asia movements, as well as for cargoes back northbound again.

Benzene export business is very thin for January on the transpacific east route, and February is not expected to produce that much either. However, March should see a lot more benzene business because Asian styrene plants begin their turnaround season, and this should free up a lot of captive benzene. So far, rates have not gone down, and indeed, 5,000 tons of mixed xylenes was fixed from Taiwan to the U.S. Gulf in the mid $40s/t, which represents a mild increase. The market into Europe is similar to last week, and because of the lack of competition, owners can still achieve some very strong rates on the parcels trade. January space is also somewhat tight for stainless steel tonnage, and a cargo of 10,000 tons of oleochemicals was heard to have gone at $107/t, which is a whopping $20/t-$30/t more than usual.

There is no slowdown reported in the regional India and the Middle East Gulf market, with some strong rates being seen. Parcels of around 5,000 tons from the Middle East Gulf to the west coast of India have even topped $30/t, although this level is rather uncommon. Port delays have reduced slightly in India, but are still lengthy in ports such as Al Jubail, Saudi Arabia. It is not unusual to see a ship lose a week just transiting the Middle East Gulf region.

Eastbound markets are a little slower and some space is opening up for the second half of January.

Westbound is pretty steady too. There are reports that some Iranian caustic sellers are targeting the European market to offset a possible reduction in demand from their traditional markets in India due to the imposition of anti-dumping tariffs. If so, some owners may benefit from the increase in backhaul cargoes to Europe.

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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