SSY Base Oil Shipping Report


All the main regions, with the exception of Asia have seen slightly less new business compared to the previous week. For the most part though, rates have either stayed unchanged, or are a little stronger.

U.S. Gulf

The so-called meat and potato routes from the U.S. Gulf to the Far East have not really experienced much activity this week. These would normally consist of 5,000-ton parcels of styrene or benzene, toulene, and xylene into Korea or China, but all these products are in tight supply in the U.S. Gulf. Instead, there have been all manner of products that have involved outports, or specialist coating, or heating, as is the case with base oil and phenol. Consequently, rates for some of these shipments have been higher than the levels that the styrene and aromatics generally command. Base oils, for example, have been seeing rates in the $80s per metric ton to China, while ethanol to Southeast Asia goes in the $70s and $80s/t. Ethylene dichloride is another product that has been fixing more regularly into Asia and this too goes for more than the $60-62/t that 10,000 tons of aromatics would command. Since space is tight in the first half of March, owners may argue that all cargoes, irrespective of grade should collect a premium. So far, this has yet to be tested.

Even though there is no styrene nor any benzene on the transatlantic route, rates have not really dropped any further on this route. The reason appears to be that contractual demand is giving a solid foundation to scheduled ships, and that the spot market is providing a wide and diverse range of products, most of which will offer tasty rates to any outsiders in position. Not that there are many outsiders around in the U.S. Gulf over the next couple of weeks anyway. Available cargoes include technical corn oil, phenol, cumene and ethanol. There are some base oils too from the U.S. Gulf, but there is a possibility that this cargo could end up on a product tanker, along with a large slug of diesel.

Delays are endemic for most of the regular players running ships out of the U.S. Gulf into the Caribbean these days, thanks to the fog that has been almost a daily occurrence. As a result, prompt space is rarely available, but since total demand has not really increased, so too are rates mostly unchanged. Base oils continue to be quoted into Mexico, while the chemicals markets see the usual caustic, methanol, toluene, ethanol and urea ammonia nitrate possibilities.

Ethanol continues to dominate the route from the U.S. Gulf to the east coast of South America, the rates for which still seem to be climbing, with some deals recording levels well into the $50s/t. Paraxylene is another grade that has seen some action, and there is a tender for 10,000 tons of ethylene dichloride into Maceio for end March or early April delivery. Some base oil activity has been noted from the U.S. Gulf to Brazil, but the business does not seem to be particularly firm.

The market remains busy and an outsider was able to go on berth by taking 10,000 tons of ethylene dichloride to India. The same ship fixed 1,300 tons of nonene into the west coast of India at a staggering $225/t. Other charterers were looking to cover 1,000 tons of mono propylene glycol into India, but, having been quoted rates in excess of $230/t, they appear to have retreated for the moment. Aside from ethanol, there is still some phenol to be done, as well as some base oils.


Business has been somewhat sporadic within the North Sea and Baltic route. In some cases, owners have covered all their short-term positions, but there are still quite a lot of ships that are either prompt, or close to being prompt. Rates therefore are mostly under downwards pressure. Base oils have been reasonably active again, with cargoes moving down from the Baltic as well as back up into the Baltic.

Space is a bit tighter going into the Mediterranean, and a number of cargoes have been fixed at levels slightly above last-done. Routine requirements of styrene, polyol, FAME, orthoxylene, acrylonitrile and acetates have all been covered, as has a rather unusual requirement for 10,000 tons of pyrolysis gasoline into Priolo, Italy. A cargo of 4,500 tons of base oil is understood to be shipping to Turkey from Continental Europe.

Demand has recovered a little on the northbound route, with cargoes such as pyrolysis gasoline, paraxylene, base oil and benzene noted. Some of the regular parcels of aromatics from Italy and the Central Mediterranean have returned to the market too. Space, though a little tighter, is still available for end February and early March.

There may be fewer biodiesel cargoes quoted this week along the inter-Mediterranean route, but there is some compensation in the form of more caustic requirements as plants come back from turnaround, as well as from products such as MTBE, as refiners gear up for the summer season. Base oils have been moderately busy with cargoes to the usual destinations. Rates look to be largely static.

Rates remain quite strong on the westbound transatlantic route through a combination of good demand and tight supply of prompt vessel space. Pygas has been fairly active on this trade lane, as has paraxylene, although traders were able to convince an owner to accept high $40s/t for 5,000 tons of paraxylene to Mexico instead of the $90 that was worked last week. As it is, the higher level was totally artificial, and high $40s/t is still a respectable number for the owner, being relatively strong in comparison the rates in the low $40s/t that were being agreed until a few weeks ago. Base oils have been low-key this week.

The Europe to Far East route has not yet finished with base oil, and there have been further requirements noted, including another large lot of close to 17,000 tons to Singapore. Aromatics however are quieter. It remains to be seen how firm demand will be for March loading.

There is not much prompt space left to India or the Middle East Gulf, with traders continuing to push small parcels of solvents. Fewer base oil possibilities have been noted however.


As mentioned last week, the process of rebuilding inventories in China along Asias domestic route continues to gather pace. Aromatics are particularly active, and rates on the regular routes from Korea to mid China have seen an increase of a couple of dollars. 3,000-ton parcels of Ulsan to mid-China can easily command low $20s/t for example. Only the occasional ship still has February space. Since the intra-Far East market is clearly the place to be from the point of view of a ship owner, they are reluctant to send their ships southbound, with the result that southbound rates are stable, even though demand is a little softer. Northbound demand however is certainly stronger and rates have been boosted by a couple of dollars, with close to mid $40s/t being recorded for 3,000-ton parcels from Singapore to mid-China.

Rates have increased on the transpacific east route, though they have yet to breach $50/t for 5,000 tons it seems. Styrene has been discussed as going to the U.S., and some shipments have been booked, but there has been no great wave of material booked. Benzene is now starting to appear for March, which may keep the momentum going, especially since there is a not a great deal of space. The market to Europe saw rates recover a little. Styrene has been present, as well as cyclohexane, vinyl acetate monomer and diethylene glycol. A large lot of acetic acid and solvents was worked, and an outsider is reported to have gone on berth with 10,000 tons phosphoric acid from China to the United Kingdom at $80/t. Needless to say, there is minimal base oil interest.

It has been another busy week in the regional markets along the India and the Middle East Gulf route, with ample demand to keep all the ships in the region occupied. Eastbound continues to collect interest in moving base oils to Asia, and, since space is limited, rates are holding steady. Westbound sees a little more interest in benzene, paraxylene, methanol, acetates, linear alkyl benzene, caustic and butanediol. 5,000 tons of normal paraffins were booked from Ras Laffan, Qatar, to the U.S. Gulf in the low- to mid- $80s/t, with a further 3,000 tons of parcel booked at $90/t. Castor oil exports have recommenced from India, helping fill some of the regular carriers.

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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