SSY Base Oil Shipping Report


The European market was quiet last week due to a major industry event. Asia shut down for a while due to Golden Week, but the market in the U.S. Gulf was reasonably active post-Harvey.

U.S. Gulf

Demand is slowly starting to crank up again along the Far East route as pre-Harvey cargoes make an appearance. However, the final execution on many of these had to be put on hold because of widespread public holidays in Asia last week. Ethylene dichloride is one of the main commodities, with requirements noted into North China, Yangtze River, China, Japan, Taiwan and Thailand. Several large methanol movements have been reported, including 30,000 tons to 40,000 tons from the Caribbean to China at $48 per metric ton. Ethanol is another grade under discussion. Styrene, of course, is a mainstream product. 4,000 tons of acrylonitrile were fixed from New Orleans, Louisiana, to Korea in the mid $50s/t. Parcels of glycol and nonene have been seen. 20,000 tons of technical corn oil from Houston to Singapore was booked. October space is tighter and it may be necessary to pull in outsiders to cover everything. Numbers are still talked in the low to mid $50s/t for 5,000 tons lots, but it remains to be seen how much longer rates can be contained at this level.

Traders have begun to ask questions again about styrene to Europe. October space is tight and 5,000-ton cargoes from Houston to Rotterdam have been confirmed as fixed in the mid $50s/t. 5,000 tons of cumene was heard to be fixed from Corpus Christi, Texas, to Antwerp-Rotterdam-Amsterdam, and 3,000 tons to 5,000 tons of vinyl acetate monomer was circulated from Houston to Antwerp. Methanol, caustic and glycols have been fixed into the Mediterranean, but base oils have been almost non-existent, aside from the regular large lots that are bundled together with clean petroleum out of the U.S. Gulf.

Base oils are not getting much attention in the Caribbean. Plenty of caustic has been booked, and cargoes of ethanol and methanol have been done too. Vegetable oil has been fixed from the U.S. Gulf to Buenaventura, Columbia, and Puerto Castilla, Honduras, while another 7,500 tons from Norfolk, Virginia, to Rio Haina, Dominican Republic fetched mid $30s/t.

Ethanol is still the king on the route to the east coast of South America. Rates are rather firm too – 20,000 cubic meters out of the Mississippi paid $54/t, a further 21,000cbm secured high $50s/t, again from New Orleans, while 11,200 tons from Texas City, Texas, realized high $60s/t, all being to at least three ports discharge each. Caustic, paraxylene and styrene have recently been fixed on this direction.


A growing number of vessels are showing prompt positions into the North Sea and Baltic this week. It is as if the market has still to restart after last weeks European Petrochemical Association event in Berlin. Base oils have been slow with only a couple of recent shipments out of the Baltic, although there have been several cargoes back up into the Baltic and along the coast. Ethanol and biodiesel probably share the honors for most activity.

Cargo volumes have been a little disappointing into the Mediterranean, with owners quickly snapping up the tastier offerings. Base oils have helped fill the space, with cargoes fixed to Egypt, and there is interest again to Turkey from the Baltic. A large base oil combination cargo attempted to go to Gebze and Gemlik, Turkey, until it was realized that Gemlik cannot accept ships much larger than 5,000 dwt. 5,000 tons of glycerine shipped Rotterdam to Odessa, Ukraine, in the mid $50s/t, but 6,000 tons of paraxylene from Rotterdam to Iskenderun, Turkey, secured low $30s/t.

It would appear that there have been some base oils moving up from Kavkaz, Russia, and from Greece, as well as the regular in-house movements by the majors. The market has not exactly been busy though. More benzene and pyrolysis gasoline has been noted, and there should have been another cumene shipment from Italy, except this ended up in Spain instead. Rates have been steady for the past couple of weeks.

Most observers would concur that demand alone the inter-Mediterranean route has not yet reached the same levels as pre-EPCA, at least on the chemical front. Vegetable oil demand is, however, picking up fast, with quite a lot of November business already quoted. Base oils have been fairly active with shipments to most of the regular ports. With quite a high proportion of prompt space around, some competitive freights can be expected this week.

It has been another slow week westbound. Traders surely keep checking freight levels for cargoes of benzene and pyrolysis gasoline, but very few actually get fixed. Several ships are on berth with last bits of space still to be filled and these are where the bargain freights will be found. Ostensibly, 5,000-ton cargoes from Rotterdam to Houston have been going in the $28-30/t region, but there might now be some wriggle room.

All in all, it has been another sedentary week into the Far East. Scheduled ships have been picking off the small parcels, still at unchanged levels, but there has been nothing much of any great size apart from 8,000 tons base oils to Singapore and Ulsan, Korea, that got done.

It has been a week with a number of small parcels but also some larger lots into India and the Middle East Gulf, and with the scheduled ships getting full there have been possibilities for outsiders to slip on berth.


Many had expected the Asian market to fall silent during the week-long Golden Week holiday in China, and, while the market was not quite as energetic as before, there were still a large number of requirements to be covered, ranging from prompt loading through to late November. It was also apparent that many of these cargoes had been first quoted up to three weeks previously, and have yet to be covered, showing how tight the space situation is. Some suggest that rates could have declined during this period, just because it was a holiday period, but more rates will have gone up than come down. A fairly strong clean petroleum market, aided by decent palm oil demand is helping to keep most ships busy. Base oils have been active and rates firm. 3,000 tons of base oils from Cilacap, Indonesia, to Nantong, China, fixed at $75/t, for example.

Space is tight on the transpacific route for prompt loading, even if benzene and paraxylene demand is quiet. Caustic has been studied to the Caribbean and U.S. Gulf, and 2,000 tons of acetone were fixed from Singapore to Houston, reportedly at $90/t. Prompt space is also tight to Europe. Biodiesel is the main product with rates for 7,000-ton to 9,000-ton cargoes from China to Rotterdam being in the mid $70s/t. 3,000 tons of methylmethacrylate from Thailand to Antwerp-Rotterdam-Amsterdam cost $125/t. 1,800 tons of base oils from Southeast Asia to Alexandria, Egypt, collected $118/t, and 3,000 tons of base oils from Cilacap to Alexandria achieved $125/t.

Space has been tight for a while in the regional markets, and a number of cargoes continue to linger without getting covered. Base oils are pretty active into India and the Middle East Gulf, with shipments out of the Red Sea, Iran, Pakistan and Abu Dhabi. It is expected that things may slow down, however, during the Diwali period. Eastbound remains active, with many cargoes repeatedly quoted without seemingly being able to find space. Cargoes include base oils, pyrolysis gasoline, paraxylene, orthoxylene, linear alkyl benzene, paraffins, methyl tertiarybutyl ether, methanol, butanol and ethylene dichloride. Westbound space has become very scarce for October. 5,000 tons of easy chemicals from the Middle East Gulf to Marmara, Turkey, obtained $75/t for example, which is quite a bit higher than charterers have become accustomed to.

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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