SSY Base Oil Shipping Report


Europe is looking busier at last, whereas the market within Asia has perhaps come off the boil. The United States is still strong in the direction of Asia, but otherwise had a quieter week.

U.S. Gulf

December space into the Far East has become very scarce, yet undeterred, traders continue to quote cargoes in this direction. The next step will probably be for some of the irregular carriers to go on berth, which will trigger another round of rate increases. Should cargo interest persist, levels of $70 per metric ton can be expected, and indeed have already been paid for, for 10,000-ton cargoes of paraxylene and ethylene dichloride. The list of inquiries includes more paraxylene and ethylene dichloride as well as ethanol, glycol and phenol.

Freight rates along the transatlantic route have begun to subside due to the excess amount of vessel space available for December. Levels in the $40s/t could easily become the norm, and will depend on whether styrene takes off or not. A producer has been looking at 10,000 tons of styrene from the Mississippi to Antwerp-Rotterdam-Amsterdam, and a few traders are beginning to sniff around about styrene too. Five-thousand tons of glycol was fixed from Houston to Gebze, Turkey, for the end of December, with the rate reportedly around $70/t. Base oils in the amount of 7,500 tons were fixed from the U.S. Gulf to Nigeria.

Fog has caused the closure of the Houston Ship Channel on a several occasions this week, providing a taste of a disruption that is likely to become more commonplace. Otherwise, the Caribbean route has been rather slow. Traders are looking to send 1,200 tons of base oils to Rio Haina, Dominican Republic, and there have been some inquiries to ship ethanol, caustic, styrene and palm oil into the Caribbean.

Ethanol has started to ship again to Brazil, with several ships booked already and with further shipments pending. Space into the east coast of South America seems to be readily available for now, and rates have not changed. From Pascagoula, Mississippi to Brazil, 3,500 tons of base oils were worked and 5,000 tons of urea ammonia nitrate was quoted into Santos, Brazil, from the Mississippi. A couple of traders are contesting to see who will win the latest tender of paraxylene into Suape, Brazil.

Traders continue to check freight levels for ethylene dichloride into India for the end of December. A prompt ethanol shipment to India is heard to be struggling to find suitable space, and a shipment of 10,000 tons of base oils to India remains a possibility. Space remains tight along the India and the Middle East Gulf route through to the end of the year, which might persuade an outsider to come on berth.


Many observers were struck at how slow the North Sea and Baltic region was during the last week of November, but since then, there has been a rapid increase in demand that has tightened up the amount of space available, with more and more owners reporting their ships to be full until mid-month, or beyond is some cases. Base oil shipments have mostly been the repetitive type, with only a few new requirements spotted out of the Baltic. Rates are mostly stable, but there may come a time when owners start to charge more for their prompt space.

It has to be said that demand has been reasonably consistent on the southbound route, but the amount of space that has always been available has meant that most requirements have been fixed fairly easily. It has been suggested that small rate increases have been effected by owners on what can be regarded as routine movements, such as biodiesel into the West Mediterranean and paraxylene into Turkey, and it will have to be seen whether this trend becomes more firmly established.

Rates appear to have peaked on the northbound route. Five thousand tons of aromatics from Priolo, Italy, to Antwerp-Rotterdam-Amsterdam were booked at 215,000 for end November loading, whereas the latest requirement for the first half of December was put on subjects at 195,000. Only a few of the aromatics inquiries from the previous week actually materialized, while base oil activity is mostly regular business.

Business has been sluggish within the Mediterranean. Prompt space can be found, while much of the fleet will be open within the next 10 days, keeping freight levels competitive. The situation would be much worse were if it were not for biodiesel, and that applies to the whole of Europe. There have been at least 70 fixtures to inquiries of biodiesel within Europe over the past fortnight, with around two thirds of those involving the Mediterranean. Base oils continue to be noted within the Mediterranean with cargoes going to the usual destinations.

Scheduled space on the transatlantic route has thinned a little, but there should always be spare ships available in Europe that could be willing to go on berth. Paraxylene and pyrolysis gasoline to benzene are reported to be the main commodities moving westbound these days. Levels of around $30/t seem to apply to the paraxylene movements from Rotterdam to the U.S. Atlantic Coast. Base oil activity seems negligible presently.

Demand along the Far East route has strengthened for December, and the first half of this months space is tight. One of the scheduled carriers aims to rectify that situation by inserting an additional vessel on those dates, partly to cover some additional contractual volumes but also to thwart the possibility of outsiders coming on berth. As it turns out, there have been a number of extra ships, both from Continental Europe as well as from the Mediterranean, and most have been able to fill up. Products have almost entirely consisted of chemicals with the only base oil possibility being a routine move from Antwerp-Rotterdam-Amsterdam to Singapore and Korea for the end of December.

Space to India and the Middle East Gulf is considered to be scarce for the first half of December with all manner of small chemicals parcels vying for owners attention. Several of these have been out on the market for a couple of weeks already. Rates are looking a little firmer. For example, 2,000 tons of easy chemicals from the West Mediterranean to the west coast of India fixed for around $120/t. An unusual base oil enquiry of 7,000 tons to 10,000 tons was quoted from Novorossisk, Russia, to Hamriyah, U.A.E.


The pattern in domestic Asia that we first identified in last weeks report has continued through this week, namely that fewer new requirements have been quoted on some of the intra-Asia routes. Both northbound and southbound routes seem to be thus affected. Intra-Southeast Asia too, although the intra-Far East market remains very busy with lots of new requirements posted for shipment all the way through December. It is conceivable that the lull in demand has been caused by bad weather throughout much of Asia, and it is entirely understandable that charterers are wary about putting more enquiry into the market when so many ships are already running late. Arrival windows will invariably have been disrupted and it will be difficult to gauge how much offtake there will have been and consequently how much re-ordering can take place. Even base oil traffic has been hit, with fewer routine inquiries from Korea and Southeast Asia. Where there is tightness of vessel space, rates continue to rise, with 3,000-ton parcels from Korea to mid China now attaining levels of $27-29/t.

Demand appears to have slowed on the transpacific route for December. Benzene has been one of the main commodities on that service, but it would seem that nothing is being conducted past the end of December. Rates are no longer at the extremes of $70/t, and instead rates in the $50s/t are being quoted by owners for parcels from Ulsan, South Korea, to Houston. The market to Europe also seems to have peaked and it is now a waiting game, with both charterers and owners each waiting for the other to give way first. Several ships have gone on berth with chunks of acetic acid and are looking for parcels. Biodiesel is another active grade. Base oils continue to be spoken about, while benzene has started to make a rare appearance. Rates on the large slugs of sulphuric acid from South Korea to Morocco have been returning rates in the mid $50s/t, as compared to a few months ago when rates were in the mid $30s/t.

Prompt space remains very tight in the regional markets into India and the Middle East Gulf, yet in spite of this, rates are considered to be flat with little or no firm tendency. Base oils are fairly busy, with a number of shipments from Al Ruwais, U.A.E., Iran and the Red Sea. Berth congestion in the area remains a major issue. Eastbound space is also extremely tight for December, but here too, rates are either stable, or only marginally firmer. Westbound is largely unchanged. A couple of caustic shipments were booked into the Mediterranean, and benzene has also been noted out of the Middle East Gulf. Ten thousand tons of vinyl acetate monomer from Al Jubail, Saudi Arabia, to Adabiya, Egypt, and Antwerp is reported to be seeing freights in the very low $60s/t for the first half of January. Several shipments of sulfuric acid have been booked from India to Morocco.

Adrian Brown is a senior market analyst for chemicals and base oils with SSY Shipbrokers, London, can be reached or +44 12 0750 7507. Information about SSY can be found at In the Houston office,Steve Rosenthalof SSY’s Chemical Tanker Department can be reached directly at +1 (713) 652-270 and Jordi Maymi in Singapore can be reached at +65 6854-7127.

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