SSY Base Oil Shipping Report


A very slow start to the year: many ships are idle, a dozen or so of which have been without employment since before Christmas. Many others are entering their second week without finding cargoes. Europe, Asia and the United States are all affected. The prospects of new business developing this week are not good, which would imply that very competitive freight levels may be achievable for cargoes that are fully firm.

U.S. Gulf
The abundance of ships open in the U.S. Gulf of Mexico over the next week continues to exert downward pressure on freights. There are some small parcels from the U.S. Gulf to the Caribbean, but owners are cautious about committing tonnage unless they can obtain a full cargo. The alternatives for their ships are bleak however.

Nothing much is moving from the U.S. Gulf to the Far East, and when it does, there are plenty of offers in the mid $40s per ton for 5,000 or 10,000 ton cargoes.

The U.S. Gulf to India may provide some interesting numbers – we see vegetable oils from the Gulf to Jeddah attracting offers of $60/t.

Eastbound transatlantic seems unable to generate much beyond biodiesel cargoes, the rates for which are in the low-to-mid $30s/t for 5,000 to 10,000 t lots from the U.S. Gulf to Antwerp, Rotterdam or Amsterdam. There are a number of vegetable oil possibilities from South America, but for the owners it is hard to see any cargoes of substance, unless they end up ballasting south from the U.S. Gulf. Try $40 to $45/t for 5,000 t lots from the U.S. Gulf to Brazil.

Inter-European coastal trades are very quiet, and there are a lot of ships open in prompt positions. A lot of chemical tankers are trying to earn a living in the clean petroleum trades in Northwest Europe, but tonnage supply is too great, keeping freights weak. Biodiesel cargoes probably remain the most prolific of all spot market requirements.

Exports from the Baltic have fallen during the Russian holidays. Some owners are even considering entering the dirty trades in an attempt to avoid the overcapacity in both the chemicals and clean petroleum trades.

In the Mediterranean, vegetable oil is perceived as the more attractive option. Consider $38/t for 3,000 t from Spain to the Eastern Mediterranean, and $42/t from the Black Sea to the Western Mediterranean. Plenty of deep-sea ships are open in the Mediterranean and Northwest Europe, but most are looking for larger cargoes. There are good possibilities to pick off completion space at competitive levels however. From Northwest Europe, 3,000 t to the Caribbean could go for $75/t. Northwest Europe to West Africa would probably still see levels of around $75 to $80/t for 6,000 to 8,000 t.

Europe to India is flat, and with no phosphoric acid being shipped there are good possibilities to find tonnage willing to do $65/t or less for 5,000 t.

The economic downturn is evident in the chemicals market within Asia, with a lot of local tonnage open for intra-Asian cargoes. The Lunar Holiday commences Jan. 26 and would normally produce a flurry of enquiries in the run-up period. There is no real sign of exports increasing from the region, however.

Around 10 ships are still fully open in Northeast Asia looking for cargoes to position the ships back to Europe or the Americas, although not all have majors approvals, since some are straight out of the yard. We see levels of $90 to $95/t on the basis of 10,000 t from China or Korea to the Mediterranean or Antwerp/Rotterdam/Amsterdam, but we anticipate some reduction as alternative cargoes such as palm oil and molasses from Southeast Asia to the Mediterranean or Northwest Europe are paying not much more than $70 to $75/t. Business is reasonably brisk from the Middle East Gulf (global shippers name for Persian Gulf/Arab Gulf) to India, with chemicals seen both to Asia and Europe. A 5,000 t cargo from Iran to the Eastern Mediterranean would likely fetch $80/t.

The enlarged naval presence in the Gulf of Aden has enjoyed some notable successes recently against the pirates, with no new reported hijackings having taken place. Nevertheless, there continue to be attempted hijackings, with one such action yesterday, fortunately thwarted by naval intervention, although not before one crew member was wounded by rifle fire. The latest Exxon enquiry of base oils from Augusta to Jebel Ali is the first in which we have seen a charterer specify that the cargo must be transported via Cape Horn instead of leaving the option of route selection open to the ship owner.

This report was compiled by Adrian Brown, senior market analyst for chemicals and base oils, SSY Shipbrokers, London. Information about SSY can be found on their web site Adrian Brown, in the U.K., can be reached directly at or by phone at +44 1207-507507. In the U.S., SSYs Steve Rosenthal can be reached at or +1 203-961-1566.

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