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July 30, 2019

Volume 3 Issue 8

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SSY Base Oil Shipping Report

There have not been any particular developments in the U.S. markets. Europe is similar, if perhaps a touch quieter than previously. Asia too is gently ticking over.

U.S. Gulf

The market is moving along nicely on the Caribbean route. Contractual commitments are running at a steady pace, meaning that the region is not inundated with space, and nor is there an overhang of vessels with nowhere else to go. A tender to supply 6,000 tons to 8,500 tons of ethanol to Kingston, Jamaica, and Montego Bay, Jamaica, was awarded to one of the usual players with the cargo likely to be stemmed from Texas City, Texas. Those charterers also have 12,500 tons of ethanol to Colombia for early August. Elsewhere, a 6,000 tons parcel of caustic was quoted from the U.S. Gulf to Cartagena, Colombia, and Point Lisas, Trinidad and Tobago, for the first half of August.

Demand to South America remains brisk. Following last week’s fixtures of ethylene dichloride and caustic to Brazil, the charterers have entered the market for another 23,000 tons to 25,000 tons combination to be shipped the second half of August. Paraxylene has also been active into Suape, Brazil, with at least two shipments heard quoted for August, possibly with some acetic acid to be combined.

Ethanol has seen several liftings take place to Brazil, and a fresh 20,000 cubic meters to 25,000cbm has reputedly been covered for early August at $49.50 per metric ton. Several traders are looking at sending 1,000 ton to 2,000-ton parcels of glycol from Houston to Campana, Argentina, for August, and 500 tons of caustic potash was quoted to the same destination from Taft, Louisiana, or Houston. Thirty thousand tons to 35,000 tons of urea ammonia nitrate has been quoted from Point Lisas, Trinidad and Tobago, to Argentina for prompt loading.

It has been a fairly quiet week to Continental Europe, with fewer styrene possibilities heard. Traders are checking ethanol however, with various parcels ranging from 5,000 tons to 12,000 tons quoted. Two thousand two hundred tons of turpentine was quoted from Savannah, Georgia, to Bayonne, France. Both styrene and glycol are being quoted on a regular basis into Turkey.

Ethylene dichloride has also been seen into both Turkey and Barcelona in 5,000 tons to 10,000 tons sizes. Four thousand tons to 5,000 tons caustic was circulated from Freeport, U.S., to Antwerp, Belgium, and 3,000 tons of monoethylene glycol was checking rates from Houston to Algeciras, Spain. Three thousand tons of vegetable oil was mentioned from New Orleans, Louisiana, to Dunkirk, France, for August. Fifteen thousand tons of base oils concluded from Paulsboro, New Jersey, to Lagos, Nigeria.

Prompt space remains scarce to Asia. Several ships have August tanks remaining but claim to be receiving a lot of enquiry for the balance space. Traders are considering sending ethylene dichloride to various destinations in Asia. Traders are quoting 7,000 tons of what could be styrene from Houston to Korea for the first half of August. A cargo of 10,000 tons to 25,000 tons of vegetable oil is expected to go to Korea, loading the second half of August from New Orleans, Louisiana.

Fifteen thousand tons of ethylene dichloride was reportedly fixed from Point Comfort, Texas, to the west coast of India, loading July 20 through the 25. Traders have been discussing a further possible 5,000 tons to 10,000 tons of ethylene dichloride from the U.S. Gulf to the west coast of India for August loading. Traders who missed out on the July tender of base oils from Paulsboro, New Jersey, are attempting to send 10,000 tons to 15,000 tons to India from Paulsboro in August.

Europe

Owners feel that the market could be busier in the North Sea and Baltic region, but at the same time they agree that July could have been far worse and it turns out that the majority of ships still have a voyage or two in hand. Versatility has been the key, with several sophisticated chemical carriers resorting to cargoes such as clean petroleum, urea ammonia nitrate, adblue, biodiesel and simple products such as caustic and methanol.

Owners have been generally able to fill up on the Mediterranean run. Five thousand five hundred tons of pyrolysis gasoline from Dunkirk, France, to Priolo, Italy, fetched €210,000 and 1,250 tons of acrylonitrile from Rotterdam to Torres, Italy, achieved €70/t. Ten thousand tons of methanol was quoted from Rotterdam to Damietta, Egypt, and small parcels of aniline and MDI were seen into Turkey. Ethanol continues to ship to Fos, France, and yet more base oils were quoted into Vado, Italy.

Seven thousand tons of caustic concluded from Rotterdam to Genoa, Italy, and there have been other caustic shipments too into Ravenna, Italy; Spain; and Turkey. A large lot of paraxylene and paraffins were booked from Kotka, Finland, while cargoes of orthoxylene, ethylene dichloride, ammonium polyphosphate, acetic acid, glycerine and styrene were noted. FAME has been lively, with cargoes ranging from 4,000 tons to 15,000 tons to the West and East Mediterranean.

Cargo demand northbound has been surprisingly good for July. Rates are nothing special, but owners are happy to have the volume. FAME has proved to be active. Two thousand tons of base oils were noted from Augusta, Sicily, to Rotterdam and 5,000 tons of base oils were quoted from Kavkaz, Russia, to Antwerp-Rotterdam-Amsterdam. Nine thousand tons of caustic concluded from Lavera, France, to Rauma, Finland, and 6,000 tons of pyrolysis gasoline fixed from Sines, Portugal, to Antwerp, Belgium.

Five thousand tons of benzene went from Aliaga, Turkey, to Gonfreville, France, while 3,000 tons of benzene fixed from Lavera, France, to Aveiro, Portugal. A cargo of toluene concluded from Priolo, Italy, to Antwerp-Rotterdam-Amsterdam. Three thousand tons of nitric acid from Temryuk, Russia, to Antwerp, Belgium, was an unusual request. Two thousand tons to 2,500 tons of acetic acid fixed from Kavkaz, Russia, to Algeciras, Spain, and Sines, Portugal. Six thousand tons of vegetable oil from Izmail, Ukraine, to Rotterdam or Rostock, Russia, seemingly paid a premium over usual levels. Several cargoes of wax were noted from Augusta, Italy, and Alexandria, Egypt, and glycerine was booked from Spain and the Adriatic.

There are a few more ships that are on the verge of being prompt, but overall, the market between the Mediterranean has been steady. Five thousand tons of methyl tertiarybutyl ether from Fos, France, to Haifa, Israel. fixed at $34/t while 4,750 tons of methyl tertiarybutyl ether from Malta to Rijeka, Croatia, attained €120,000, both rates being higher than usual. More methyl tertiarybutyl ether and ETBE was booked into Midea, Greece, and Spain, and methanol was fixed into Trieste, Italy, and Huelva, Spain. Base oils were shipped into Morocco, Greece, Egypt, Israel and Turkey. FAME has continued to be very active too.

It has been a frustrating week for owners along transatlantic routes, with arbitrage for products such as benzene rarely staying open for longer than one day at a time. Some benzene has been booked, but at highly competitive levels, while conversely 12,000 tons of paraxylene was booked into Mexico for $3/t more than the previous shipment. Fifteen thousand tons of paraxylene fixed from Kulevi, Georgia, to the U.S. Atlantic Coast. Ten thousand tons of FAME from Hamburg, Germany, to Houston was being worked in the very low $30s/t. Three thousand tons of methyl ethyl ketone from Fawley, U.K., to Houston yielded $49/t. Methanol is being studied from various locations.

A couple more styrene cargoes were booked to the Far East from Gonfreville, France, and traders are looking at sending methanol to China, but demand is very subdued otherwise, and even routine requirements have disappeared. Four thousand three hundred tons to 6,600 tons of base oils were quoted from Antwerp, Belgium, to Singapore and Ulsan, South Korea.

More small parcels have been quoted to India and the Middle East Gulf this week, helping fill out some of the vessels on berth. One thousand tons of drilling fluid was noted from Le Havre, France, to Kandla, India, and some polyol was seen to Egypt. A small lot of aniline was quoted from Tees, United Kingdom, to Kandla and some oxo-alcohols were seen Antwerp-Rotterdam-Amsterdam to Karachi, Pakistan.

Traders have been looking at a combination of styrene, acetone and oxo-alcohols to India, and others quoted some phenol to Kandla. Two thousand tons to 3,000 tons of chemicals were noted Antwerp-Rotterdam-Amsterdam to Kandla or Jebel Ali, United Arab Emirates, for both the first half of and the second half of August. Two thousand tons to 3,000 tons of acrylonitrile was spotted from Ventspils, Latvia, to India for mid-August, and 2,000 tons of linear alkyl benzene was quoted from Algeciras, Spain, to Mundra, India. Nineteen thousand tons of phosphoric acid from La Skhira, Tunisia, to Kakinada, India, fixed for around $35-36/t.

Asia

Thenumber of ships fixed through to Northeast Asia into August has increased, but end July space can still be found. Several cargoes of phenol were noted into Japan and Taiwan, while acetone was quoted into China. Two thousand tons of toluene was seen from Ulsan, South Korea, to Taichung, Taiwan, and some MIBK was quoted into China. It has been a busier week for base oils with several cargoes looking to move into China. Tropical cyclone Danas brushed past the region this week, making landfall over Korea and causing delays.

The market remains calm southbound. Five thousand tons of base oils were quoted from Onsan, South Korea, to Guangzhou, China; Singapore; and Merak, Indonesia, and a further 1,200 tons of base oils were seen from Onsan to Hai Phong, Vietnam. One thousand seven hundred tons of base oils were noted from Mailiao, Taiwan, to Ciwandan, Indonesia, and 5,000 tons of alpha olefins were quoted from Daesan, South Korea, to Singapore.

There is completion space available on several prompt vessels coming up from Southeast Asia. Contractual volumes are described as steady. Some large lots of methanol were booked up to China and 3,000 tons of base oils were claimed to have fixed from Sri Racha, Thailand, to Nantong, China, at $45/t. Five thousand tons of pyrolysis gasoline was quoted from Map Ta Phut, Thailand, to China and the next lifting of 4,000 tons of 2-ethylhexanol from Gresik, Indonesia, to mid-China is being circulated.

Business remains muted between Southeast Asia. A steady flow of pyrolysis gasoline is being seen out of Batangas, Philippines, with weekly shipments noted. The small clean petroleum fleet has spare capacity for July loading, even though there have been more enquiries involving Indonesia and the Philippines this week.

There is not much space left from Northeast Asia until the second half of August on the Transpacific service. Benzene is still noted, and there have been discussions about paraxylene to Charleston, South Carolina. Toluene too is considered a possibility. Thirty thousand tons of sulphuric acid was booked from Oman to Lazaro Cardenas, Mexico, for a rate heard to have been at $46/t, with further similar cargoes heard for August shipment. There are more ships on berth to Europe than usual, several of which are new-buildings and therefore lack approvals. Several ships have space too from Southeast Asia, and 7,000 tons of base oils from Singapore to Valencia, Spain, and Rotterdam reportedly fixed in the high $60s/t.

Demand is quite high in the regional markets. Benzene, pyrolysis gasoline and methyl tertiarybutyl ether have been busy from India, while return cargoes include ethylene dichloride, methanol, linear alkyl benzene, glycols, styrene and paraxylene. Base oils have been busy from the Red Sea with 15,000 tons worked from Yanbu, Saudi Arabia, and Jeddah, Saudi Arabia, to Mumbai, India, and Chennai, India, in the low- to mid $40s/t.

Eastbound has not been especially active. Several ships have the first half of August space, but a prompt 10,000 tons requirement of easy chemicals from Al Jubail, Saudi Arabia, failed to come up with any offers. Ten thousand tons of paraxylene from Sohar, Oman, to Southeast Asia was quoted with freight ideas in the $32-33/t region. paraxylene, benzene and pyrolysis gasoline have been booked from India. Westbound is slow. Up to 17,500 tons of aromatics were heard fixed from the west coast of India to Mediterranean-Antwerp-Rotterdam-Amsterdam at $52.50/t.

This report was originally featured in the July 24 edition of Lube Report Americas.

Adrian Brown, a senior market analyst for chemicals and base oils with SSY Shipbrokers, London, can be reached at fix@ssychems.com or +44 12 0750 7507. Information about SSY can be found at www.ssyonline.com. In the Houston office, Steve Rosenthal of 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.