SSY Base Oil Shipping Report


Asian markets continue to thrive, but Europe has been stuck in a rut for the past month with only a few faint signs that December may be busier. The long Thanksgiving holiday ensured minimal activity in the United States.

U.S. Gulf

The route into the Far East is still the most important trade lane out of the U.S., and, in spite of the U.S. holiday, there have been companies exploring export opportunities. Phenol is one such commodity, as is ethylene dichloride, ethanol and paraxylene. December space can still be found, but it is diminishing rapidly to the extent that further outsiders are expected to pitch in and clear some of the backlog. Rates have a firm feel about them. So far, 5,000-ton parcels from Houston to main Far East ports can be booked in the mid- to high $60s, but those levels may lift through this week if demand remains robust. Some say base oils could be seen again to Asia, but nothing has materialized so far.

Cargo volumes along the transatlantic route are not monumental, but clearly contractual volumes have accounted for a lot of space, as some spot inquiries seem to linger. Several traders are looking at glycols, and several more have in mind to ship styrene. Five thousand tons of vinyl acetate monomer is under consideration from the U.S. Gulf to Antwerp. Rates are still low- to mid-$50s per metric ton for 5,000-ton parcels from Houston to Antwerp-Rotterdam-Amsterdam.

It has been rather calm in the Caribbean sector. Spot activity has been comprised on mostly small parcels of solvents, caustic, ethanol and palm oil. There has been some mutterings about base oils into Rio Haina, Dominican Republic, for December, while the 5,000 tons tender into Cartagena, Columbia, seems to have been covered for delivery the second half of December.

The path into the east coast of South America has been another route that has been subdued over the past week. Caustic has taken over from ethanol as the primary grade. No base oil activity has been detected this week.

Spot volumes into India and the Middle East Gulf are picking up right now, and that includes base oil, with interest being shown in 10,000-ton cargoes to India. Ethylene dichloride, acrylonitrile and ethanol are the other products moving. Fifteen thousand tons of caustic was booked from the U.S. Gulf to South Africa at $52-3/t for mid-January loading on a ship heading out to India.


Base oils are more apparent in the North and Baltic seas these days, with a couple of ships having been booked from Kaliningrad, Russia, to Rotterdam with 6,000-ton quantities, while several base oil shipments have been seen going in the opposite direction for early December. Biodiesel and ethanol have provided the most spot activity for owners. This area does not feel particularly lively, yet the majority of ships have work to perform. A welcome sign for owners is the amount of December cargoes that are starting to appear.

Overall, southbound spot demand has not been that dismal, yet rates have not really stiffened, probably because there is an ample supply of ships in the area. A few base oil cargoes have been spotted this week. Demand otherwise spans many different product groups, with shipments of biodiesel, paraxylene, styrene, glycol, oxo-alcohols, ethylene dichloride, acrylonitrile, vegetable oil and paraffins noted.

Aromatics have been at the forefront again of the northbound route, with quite a few shipments of benzene, toluene and pyrolysis gasoline noted from France, Italy, Portugal and Romania. Base oils are mainly term supply shipments. Rates are considered stable.

There is an abundance of prompt open space within the Mediterranean, both in the West Mediterranean as well as in the Black Sea and East Mediterranean. Demand is steadily mounting, however, which should provide work for a large proportion of idle ships. Biodiesel is probably the most significant of the spot opportunities. Base oils are more common too, which perhaps reflect their greater local availability.

There have certainly been spot requirements westbound, but again, whatever has been quoted has been swamped by an excess of available space. Paraxylene and benzene have been noted, and there have been fixtures of acid, ammonium polyphosphate, wax, solvents, acetone, acetic anhydride and even styrene is rumoured to have gone across. Traders have been talking of 5,000-ton to 10,000-ton cargoes of base oil from the Mediterranean across, but have only been asking for rate indications, so nothing is firm at this time. Rates are static.

Contractual business into the Far East has been sufficiently steady, enabling most scheduled ships to be selective on the types of spot business they wish to take as completion. Demand is a little stronger too, which has seen a couple of outsiders go on berth. A very competitive rate of $66-67/t was attributed to one of these ships for 12,000 tons of base oils to Singapore. There has been another 10,000 tons of base oils booked from Kavkaz, Russia, to Singapore, while traders are starting to ask questions about other Far East destinations.

The chemicals business into India and the Middle East Gulf is more active, with traders looking at the usual grades of aromatics, acrylonitrile, ethylene dichloride, cyclohexanone, solvent naphtha, hexane and white spirit to India, Pakistan and the United Arab Emirates. A couple of base oil requirements have been noted to India, although there may actually only be one requirement at the end of the day.


The surge in domestic demand that was apparent in the first half of November has abated through the second half of the month. However, there is enough demand out there to see the majority of ships fixed up to the middle of December. Some of that tightness is definitely attributable to bad weather, especially within Northeast Asia, where even some Korean ports were reportedly closed due to the weather.

The resulting delays has a knock-on effect, with ships missing their loading dates, but being retained as there are no real workable alternatives. Rates have either stayed the same this week, or have increased, as in the case for northbound routes where 3,000-ton cargoes from Singapore to South China can now command levels in the high $30s or even low $40s/t. Base oil activity is reasonably good, but perhaps limited due to product supply constraints.

The export market remains tight for December on the transpacific route. A couple of ships are on berth with benzene, the rates for which have been in the $50s/t again, while another ship has taken a larger cargo of base oils from Korea to the U.S. Gulf in the low $70s/t. Further benzene quotations have been heard for the second half of December, and owners remain bullish on their rate ideas. Spot demand to Europe seems quieter, yet owners still quote strong levels since contractual volumes remain high. The amount of available space is not that substantial either. Biodiesel is among the most prolific of cargoes, with some strong levels reported from restricted berths to ports. Base oils have been heard looking for space from Korea to Haifa, Israel.

There is a substantial amount of cargo being quoted in the regional markets this week, and prompt space is once again limited. Rates remain firm. Base oil quotations are numerous from the Red Sea, Middle East Gulf and Iran. Eastbound is well-served with cargoes in the 2,000 tons to 10,000 tons bracket, but this week there have been fewer of the really large lots. Rates are stable. Westbound space is scarce for December and rates continue to climb. Some traders have been eying the possibility of moving base oils into the Mediterranean from the Red Sea, but nothing appears to have fixed so far.

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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