SSY Base Oil Shipping Report


February space is looking tight on most routes out of the U.S. Deep-sea routes from Europe are active, although coastal markets lack sparkle. Asia is slowly beginning to rebuild cargo volumes after the Lunar New Year celebrations.

U.S. Gulf

There has not been a massive amount of fixing done on the route to the Far East so far, mainly because February space is just about all accounted for, while the March positions have still to receive all the contractual nominations. Once those are in, owners can start work on spot-fixing. Clearly, if a February loading is required, there is a good chance that a hefty premium will be applied by any outsider that takes the plunge and goes on berth.

Basic levels for 5,000-ton lots are around $60 per metric ton, to which a premium could be added. For example, 20,000 tons of ethylene dichloride from the U.S. Gulf to Thailand and China is reckoned to have gone in the mid $70s/t on an outsider. Another outsider claims to have fixed 3,000 tons of base oils at $140/t. Base oils have been productive on this route, with 10,000 tons heard fixed to China, with several more possible shipments to China, Vietnam, Singapore and Japan in the works.

The tight tonnage situation in the transatlantic that has been in place for several months is starting to show signs of easing. That said, 6,500 tons of specialized chemicals from the U.S. Gulf to Antwerp-Rotterdam-Amsterdam were heard to be fixed at $90/t for February. This aside, styrene is off the boil, and benzene is only a possibility at this stage, and in anticipation of imports of styrene and other aromatics into the U.S. from Asia and Europe, charterers are hoping that rates will ease back in March.

The weather took control of movements up and down the Houston Ship Channel to the Caribbean this week as fog rolled back in most days over the past week. There are currently 50 vessels stacked up inbound, and another 16 waiting outbound. There have been the usual cargoes of caustic, glycols, methanol, palm oil, molasses and aromatics, but there has also been some base oil into Mexico. With luck, this will escape some of the stronger levels that have been done this week, including $41/t for 6,000 tons of caustic and $35/t for 5,000 tons of urea ammonia nitrate.

It has been fairly quiet on the route to South Americas east coast, apart from a continuous procession of ethanol ships. Base oils, however, have seen some activity, and 2,500 tons were covered from Curacao to Brazil, and another 1,600 tons were booked from the U.S. Gulf to Rio de Janeiro. Rates are not that strong currently, with some February space still available.

Ethanol has been a prime commodity into India and the Middle East Gulf, with a number of requirements ranging from 15,000 tons up to 30,000 tons looking for cover. Base oils have also been present, and 8,500 tons out of Paulsboro, U.S., to India – with an option to go to United Arab Emirates – are reported to have gone for mid $80s/t. February space is tight and numbers are firming.


It has been one of those kinds of weeks during which a number of prompt ships have been unable to secure employment along the North Sea and Baltic routes, yet, at the same time, there have been prompt cargoes that have done the rounds and which still remain uncovered. Perhaps the deciding point has been the number of sophisticated ships that have snapped up rather basic cargoes, which generally tends to indicate that the owners have few other alternatives.

Base oils have been active, with a steady movement detected out of the Baltic. Ice is an issue in ports such as Kaliningrad, Russia, although in this kind of market it seems there is enough ice-class tonnage available.

As with the market in the North Sea, the southbound market is full of contrasts. Some rates have been very strong, while others have been surprisingly weak. Considering there is not a great deal of outsider, or non-resident tonnage around in northern Europe at the moment, it is surprising to hear some of the lower levels being discussed, but this must indicate a reduction in both spot and contractual work. There are base oils being circulated, but fewer cargoes than in the previous week.

Many of the regular northbound charters have been absent from the market over the past week, and, consequently, rates are looking rather wobbly. Base oils are still under discussion from Greece and Italy, but finding space should not be an issue currently.

There has been quite a bit of swapping around of ships on inter-Mediterranean routes this week due to bad weather causing delays and ultimately cancellations. Oddly though, there has not been such an issue finding prompt space in the West Mediterranean. Base oils have been reasonably busy, with cargoes moving into North Africa and Turkey. Should the refinery in Mohammedia be sold and eventually restart, as is under consideration, it has the potential to alter the landscape in the West Mediterranean since so many ships are currently employed ferrying fuels and base oils into Morocco.

It has been a busier week westbound along the transatlantic route, and, with a shortage of prompt space, owners have been taking the opportunity to pump rates higher. For example, 5,000 tons of paraxylene from Rotterdam to Mexico was being worked in the $90s/t, which is virtually double the regular number. At less stratospheric numbers, an arbitrage has opened to ship styrene to the U.S. due to tightness of U.S. production, which is set to last for several months, and cargoes have been booked in the high $40s/t for 4,000-ton parcels, mid $40s/t for 5,000-tons lots and low $40s/t for 7,000-ton cargoes. Pyrolysis gasoline has also been an important ingredient to the westbound leg this week. Several sulphuric acid cargoes have been booked at slightly higher levels, although another 20,000 tons of MTBE from Rotterdam to Houston seems to have gone again at $27/t.

There has been another wave of base oil business conducted to Asia. Most staggering has been a cargo of 17,000 tons from the Black Sea into the United Arab Emirates and Singapore, with levels rumoured to be in the $70s/t. The ship completed with vegetable oil into the Red Sea. Some of the smaller parcels of base oil from the Mediterranean to China have been seeing levels in the $100/t-$105/t range. Other than that, there is still some demand for mixed xylenes, toluene acrylonitrile, phenol, wax, avgas and even biodiesel.

It has been a week of heavy demand, including base oils into India and the Middle East Gulf, but also plenty of commodities such as aromatics, solvents, oxo-alcohols, phosphoric acid and vegetable oil. The jetty at Leixoes, Portugal, appears to be back in operation, at least for certain commodities, with aromatics known to have been loaded this week in this direction. Rates are firm.


Domestic demand is starting to build again following the return to work after the Chinese New Year and many more enquiries have been hitting the market, partly for March but still a large proportion wanting February loading. Stocks of many key commodities were already at low levels before the holidays, and it is probable that a period of inventory rebuilding is about to commence. Already there are requirements for paraxylene, benzene, pyrolysis gasoline,solvent naphtha C9, C5, methanol, styrene, base oil, acids, light cycle oil, alpha olefins, phenol and acetone in the intra-Far East sector alone. Tonnage supply remains plentiful in all areas of Asia for the time-being, but bad weather and heightened demand can soon make inroads in the available space.

Styrene has been the surprise commodity being worked on the transpacific east route, and since a number of owners are uncomfortable taking styrene, space has become quite scarce for February. Rates in the high $40s/t and even low $50s/t have been discussed for 5,000-ton parcels from Korea to Houston. Moreover, benzene has begun to be seen for March, but should be easier to cover than styrene. It is difficult to portray precise rates on the Asia-to-Europe market, since owners are surprisingly fickle about the level they will or wont accept. There have therefore been fixtures for 4,000-ton parcels from China to Antwerp-Rotterdam-Amsterdam at $64/t, for instance, but there have also been fixtures for 4,000 tons from Southeast Asia to Antwerp-Rotterdam-Amsterdam in the mid $80s/t. Usually, the cargo from China would be expected to cost more. Furthermore, February space is rather scattered and often there is only a solitary vessel in position that can perform the voyage.

Business is still very active in the regional market, and some owners have learned to keep their ships in the area rather than send them back whence they came. Rates can be firm. For example, 4,000 tons of easy chemicals from the Middle East Gulf to the west coast of India returned $32/t.

Base oils continue to see a lot of activity, but only a small percentage of enquiries is converted into fixtures. Eastbound trade has generated some base oil interest, alongside the usual aromatics, methanol and glycol requirements. Rates are firm.

Westbound is considered weak in contrast. Owners have been working small lots of castor oil from Kandla, India to Antwerp-Rotterdam-Amsterdam for around $100/t. There is talk of styrene, too, but another fixture of 10,000 tons of paraxylene from Yanbu, Saudi Arabia, to Antwerp-Rotterdam-Amsterdam went in the high $40s or low $50s/t, reflecting the desperation that some owners feel.

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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