SSY Base Oil Shipping Report


The market in Asia is understandably slower in advance of the Lunar New Year celebrations, but the markets in Europe and the United States have both been fairly busy, especially considering a sizeable chunk of business will have been affected by the Asian slowdown.

U.S. Gulf

Even though it has become difficult for traders to conclude many of the deals to the Far East that they had been working on, there is quite a lot of business still pending which will probably be picked up again after the lunar holidays. Some Asian countries will only have a minimal amount of holiday downtime and sales into these countries should proceed almost seamlessly.

A large cargo of base oils is believed to have been fixed into Nantong, China, from the U.S. Gulf. An 11,000-ton shipment of technical corn oil from Houston to Singapore was seemingly fixed at $95 per metric ton, but regular shipments to Korea or main Chinese ports should see levels in the low $60s/t for 5,000-ton lots for now, but perhaps higher next month.

Eastbound transatlantic trade has been steady, and prompt space a little tight, causing freight levels to creep up. It would seem that contractual nominations for February will probably be heavy and so owners are holding back until the majority of contractual nominations are in before they embark on spot fixing. Caustic, cyclohexane, vinyl acetate monomer, cumene, ethylbenzene, biodiesel and vegetable oil cargoes have been seen this week.

On routes to the Caribbean, it has been a week with sporadic action. Some of the requirements from last week remain unfixed, but others have simply faded away. Fog along the Houston Ship Channel has been a persistent irritation for all concerned. Base oils are slow at the moment.

Ethanol is master of trade to the east coast of South America, and is responsible for having swallowed a lot of space. There has been interest in moving base oils to Brazil, as well as urea ammonia nitrate, acetone, methanol, and so on. Space looks as though it will open up a bit more later in February, which could help keep rate levels in check.

The same products as last week seem to be making the news on the route to India and the Middle East Gulf – namely ethanol, ethylene dichloride and base oil. Rates appear to be stable for now.


In the North Sea region, bad weather has caused some disruption, including frozen lines in Rotterdam, the Netherlands. Ice has also been developing more extensively in the Baltic region, with ice reported all along the coast from Klaipeda, Lithuania, down to Gdansk, Poland. Kaliningrad, Russia, seems especially prone.

Furthermore, low water levels on the Rhine river are making it hazardous to move material by barge, with just 1.2 meter depth currently at Cologne, Germany, which effectively limits barges to only around 300-400 tons of cargo. Base oils have been reasonably active, with a couple of shipments logged from the Baltic to Antwerp-Rotterdam-Amsterdam. Rates are a bit firmer out of the Baltic.

Southbound January space is quite tight. Benzene in the amount of 4,000 tons from Terneuzen, the Netherlands, to Tarragona, Spain, was heard to have gone at 155,000, for example, when a more normal level would have been 120,000 or less. Cargoes of acrylonitrile, caustic, orthoxylene, ethylene dichloride, glycol, FAME and styrene have been seen. Base oil traffic is primarily confined to in-house business this week.

Northbound rates are mostly average for cargoes on the prime routes to northwestern Europe, but can be costly if slightly out of the ordinary. West Mediterranean is felt to be tight on space, as demand is plentiful and owners have the option of keeping the vessels trading within the Mediterranean. An ethanol cargo of 4,000 tons from Tarragona to La Corunna, Spain, was heard to have gone at 30/t, which is a strong figure, and 3,500 tons of FAME from Bilbao, Spain, to Rotterdam achieved $100,000, which also hefty.

Strong winds have disrupted schedules in some parts of the Mediterranean over the past week. Ice has also been reported in many of the ports in the Black Sea, with the ice campaign having started in Odessa, Ukraine, for example. At Leixoes, Portugal, operators had to deal with the problem of a ship colliding with the larger of the jetties used for chemicals and base oils, with the result that the jetty will reportedly be out of action for several weeks. Consequently, some charterers have been trying to arrange transhipments of their chemicals cargoes to either Antwerp-Rotterdam-Amsterdam or Gibraltar. Aromatics in the amount of 3,600 tons were heard to have fixed from Leixoes to Gibraltar at 100,000, but no base oils have been noted moving in this fashion.

It has been fairly busy on the westbound transatlantic route. Yet in spite of this, some benchmark shipments have achieved lower numbers, such as a couple of shipments of 5,000-10,000 tons of paraxylene from Rotterdam to Mexico which went for $37/t and $34/t, respectively. However, higher levels than before have been seen for some shipments, such as several large lots of MTBE, sulphuric acid and urea ammonia nitrate. A couple of cargoes of pyrolysis gasoline have been booked in the high $30s/t for 10,000-ton slugs. An aromatics haul of 5,000 tons from Rotterdam to Houston went in the high $30s/t. Five thousand tons of pyrolysis gasoline going from the western Mediterranean to Houston fetched high $60s/t. On the small parcels, rates can be pretty firm – 1,000 tons of phenol from Antwerp-Rotterdam-Amsterdam to the west coast of Mexico achieved $125/t, for example. There has not been much base oil business, though.

A lot of base oil has been attempted to the Far East over the past week or so but because of the tight space situation, not much was actually booked. To move 8,000 tons of hydrocracker bottoms from Lavera, France, to Korea, the charterers had to resort to fixing a small ship with an appropriately steep freight level, but such levels are higher than most base oil traders will go. Many chemicals and base oil requirements have been put on hold until after the lunar holidays.

Base oils have been buzzing on the route from Europe to India and the Middle East Gulf, too. A large chunk of base oils is rumored to have gone from Cartagena, Spain, as a spot shipment, with the ship picking up 2,000 tons of base oils from Livorno, Italy, and shipping to Mumbai at $98/t, which is a lot lower than the $120s/t being shown by other owners. Chemicals demand has been strong too – keeping space tight and rates firm.


There has been a discernible reduction in the amount of new regional business quoted over the past week, most of which is attributable to the approaching New Year celebrations. The majority of prompt cargoes quoted into China, for example, are due to vessels getting delayed or cancelled. Not all Asian countries have as lengthy holidays as China, and some volumes can still be expected from Singapore, Korea and Japan. Base oil exports from the Wakayama refinery have been affected by a recent fire.

With the prospect of hardly any spot benzene from Asia to the U.S. in February, some scheduled ship owners on the transpacific route have grown nervous. Clean petroleum may be the most logical way to reposition if cargoes are available on the vessels dates. There have been 3 or 4 cargoes of mixed xylenes from Korea, with unconfirmed reports suggesting an owner agreed to a rate in the mid $30s/t for a 9,000-ton cargo from Korea to the U.S. Gulf. Another vessel, which sailed with a substantial amount of space from Korea, managed to salvage something positive by landing a cargo of molasses from Acajutla, El Salvador, to the U.S. Gulf at $30/t.

Space on trade to Europe is somewhat tighter, with contractual demand reported to be strong and occupying much of the space on the scheduled carriers. Therefore, outsiders have been able to pick up smaller lots at very high levels – 2,000 tons of chemicals from Nanjing, China, to Antwerp, Belgium, yielded $168/t, for example. Palm oil demand is a bit better too – with 18,000-ton cargoes being fixed into the Mediterranean and the Black Sea at levels that range from low $50s/t to high $50s/t – a sizeable jump over the term of a couple of months.

Trade is slowing down quickly on the eastbound route. There have been some larger lots of methanol and MTBE, and 14,000 tons of base oils have been tried from Al Ruwais, U.A.E., to Mumbai and Ulsan, Korea. Rates remain stable. Regional business sees firm levels, however, with some owners unwilling to send their ships away from the area. Westbound has been rather slow and rates weak, apart from a deluge of Iranian caustic as predicted last week. Iranian methanol sellers have also been active into 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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