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September 10, 2019

Volume 2 Issue 37

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SSY Base Oil Shipping Report

It has been a disappointing week in Asia. European markets are mixed, with some routes performing better than others. The United States, however, is looking good for September on almost every trade lane.

Americas

Hurricane Dorian is battering the Bahamas at the moment and the experts are trying to establish where the storm will go next, but it does look as though it may brush along the coast of Florida and then head north, likely bringing some disruption to vessels and ports along the way. Otherwise, it has been an uneventful week. A couple of regular owners have fewer ships trading within the region right now, but there are several prompt mid-sized stainless candidates knocking around looking for work in any direction.

There has been some methanol from the Caribbean into the U.S. that might suit them, and there have been a couple of molasses shipments from Aguadolce, Panama, to Port Esquivel, Jamaica, and St.Croix, U.S. Virgin Islands, that could take some space off the market. Six thousand tons of caustic was booked from the U.S. Gulf to Cartagena, Colombia. Four thousand five hundred tons of tallow was quoted from Newark, New Jersey, to Puerto Quetzal, Guatemala, for September. One thousand seven hundred tons of base oils were quoted from Houston to Rio Haina, Dominican Republic, for the first half of October shipment.

Contractual volumes to South America remain quite strong, limiting the amount of space available. One of the base oil cargoes to Brazil is understood to have been booked, but it is unclear yet what happened on the other shipment.

Similarly, there was some caustic and ethylene dichloride outstanding to Brazil. Ethanol has been quiet but urea ammonia nitrate saw several requirements, with talk of 10,000 tons of urea ammonia nitrate to Santos, Brazil, for delivery in October that may have been covered in the high $40s per metric ton. Eighteen thousand five hundred tons of sulphuric acid was booked the west coast of Mexico to Brazil, with levels rumoured to have been high $40s or low $50s/t.

Styrene has been very active to Europe, with one owner fixing a total of 12,000 tons, and another vessel taking 14,000 tons. Rates are still in the low $50s/t for 5,000-ton lots. Benzene too has seen some activity, and there has been more ethanol and glycols mentioned. A shipment of glycol appears to have gone to Klaipeda, Lithuania, too.

Six thousand tons of used cooking oil was pushed from the U.S. Atlantic Coast to the east coast of the United Kingdom. Four thousand five hundred tons of crude tall oil was heard fixed from Mobile, Alabama, to Rauma, Finland, and a cargo of ethanol was reportedly booked Puerto Quetzal, Guatemala, to Antwerp-Rotterdam-Amsterdam.

The majority of ships along the Asia route have now covered their September space, more because of heavy contractual nominations than spot market demand. Fifteen thousand tons of tallow and used cooking oil from the U.S. Gulf to Singapore was heard fixed on an outsider for the second half of September. A couple of traders have been exploring styrene, but with all the activity directed to Europe it seems unlikely that anything was booked to Asia. Thirty thousand tons of methanol was booked from the Caribbean to Ningbo, China, and 20,000-30,000 tons of ethanol was covered from the west coast of the U.S. to Korea and the Philippines.

It has been fairly quiet to India and the Middle East Gulf, and there is still prompt space available. The base oil possibility from Paulsboro, New Jersey, to India was withdrawn without fixing.

Europe

Rates remain competitive to the North Sea and Baltic, with too many prompt ships around, forcing owners to acquiesce on levels. Biodiesel and ethanol are still top of the cargo lists. A bit more employment out of the Baltic has been noted, with fixtures of methyl tertiarybutyl ether, pyrolysis gasoline, cumene, acetone and base oils noted.

Despite an apparent recovery in spot demand, there are still ships around that have part-space available, pressurizing rates into the Mediterranean. Base oils have been quiet in this direction, but biodiesel has been active with cargoes seen to Lavera, France; Savona, Italy; and Varna, Bulgaria. Other fixtures include cargoes of paraxylene to Sines, Portugal; caustic to Lavera; ethanol to Fos, France, and Trapani, Italy; acrylonitrile to Yalova, Turkey; aniline to Tarragona, Spain; and styrene to Perama, Greece, and Aliaga, Turkey.

Steady demand has been recorded northbound, yet there is still some prompt space around. Seven thousand tons of aromatics from Aliaga, Turkey, to Antwerp-Rotterdam-Amsterdam yielded around $350,000. Ten thousand three hundred tons of base oils were covered from Kavkaz, Russia, to Eleusis, Greece, and Rotterdam, Netherlands.

Three thousand tons of toluene finally fixed from Priolo, Italy, to Antwerp, Belgium. Three thousand tons of benzene from Lavera, France, to Aveiro, Portugal, was covered and a cargo of glycerine was booked from Castellon, Spain, and Cartagena, Spain, to Antwerp-Rotterdam-Amsterdam. Two thousand tons of wax was quoted from Aghio, Greece, to Ghent, Belgium, and 3,000-4,000 tons of molasses were seen from Mohammedia, Morocco, to Grangemouth, Scotland. Five thousand tons of caustic concluded from Lavera, France, to Thames, U.K.

An explosion of FAME cargoes has swallowed up many of the prompt ships that were around the Mediterranean. Methyl tertiarybutyl ether and ETBE have also seen a surprising number of fixtures, given that the driving season is supposed to have ended. Trade from the Black Sea however has been thin, with the vegetable oil campaign coming to an end and waiting for the new crop to be processed.

Most of the methanol cargoes from Kulevi, Georgia, are going on in-house tonnage, though one shipment has just occurred to Gebze, Turkey, and a pyrolysis gasoline requirement from Kulevi to Cyprus looks to have been covered. Five thousand tons of base oils were booked from Cartagena, Spain, to Haifa, Israel, with levels believed to have been low €30s/t, but owners claim to be working the subsequent requirement of 3,000-3,500 tons of base oils from Cartagena to Ashdod, Israel, for around $220,000.

Demand remains fairly strong transatlantic, but with more vessels on berth than the route can cope with, rates remain depressed. Methanol is still under consideration. Four thousand tons of caustic potash fixed from Antwerp, Belgium, to Jacksonville, Florida, in the low $40s/t, but another potash to Houston remains uncovered. Three thousand five hundred tons of mixed xylenes was quoted to Savannah, Georgia, but may have been withdrawn.

Ten thousand tons of biodiesel from Hamburg to Port Everglades, Florida, was mentioned, and 4,000 tons of wax was quoted into Baton Rouge, Louisiana. Two thousand tons of base oils were noted from Antwerp, Belgium, to Tampa, Florida, with a further 8,500 tons of base oils quoted from Leixoes, Portugal, and Spain to the Caribbean. Nineteen thousand tons of sulphuric acid fixed from Aviles, Spain, to Houston and Savannah, Georgia.

Eight thousand tons of caustic was quoted from Rotterdam, Netherlands, to Philadelphia, Pennsylvania, and Savannah, Georgia, and 1,400 tons of solvents from Rotterdam to Houston fixed at $55/t. Eleven thousand tons of hydrocracker bottoms were done from Flushing to Canada. A parcel of aviation gas was quoted to Matanzas, Cuba.

Virtually nothing has occurred this week along the Far East route, apart from 10,000 tons of ethylene dichloride that was fixed to various options in Asia from Stade, France, and some butanol that was booked ex Lavera, France. More butanol has been seen from Lavera for September, but the acrylonitrile to Korea failed to materialize.

Demand is patchy, while base oil has been very quiet to India and the Middle East Gulf. Three thousand tons of linear alkyl benzene was noted from Algeciras, Spain, to Mundra, India, and 900 tons of polyol was seen from Terneuzen, Netherlands, to Jebel Ali, United Arab Emirates, while 2,550 tons of three grades of chemicals were seen from Rotterdam, Netherlands, to Yanbu, Saudi Arabia, and Jebel Ali and Abu Dhabi, United Arab Emirates. Five thousand tons of acrylonitrile concluded from Ventspils, Latvia, to the west coast of India.

Asia

Demand has been slower in Northeast Asia over the past week, and there are a lot of ships open in the first half of September that have yet to find a cargo. Toluene has been one of the more interesting grades, with 5,000 tons quoted from Yosu, South Korea, to Mailiao, Taiwan, and another 4,000 tons quoted from Zhangjiagang, China, to Ulsan, South Korea. Three thousand tons of benzene from Yosu to Kaohsiung, Taiwan, is claimed to have paid $40/t and 2,000 tons of base oils from Yosu to Maoming, China, were seemingly covered at $40/t. Four thousand tons of solvent naphtha C9 was seen from Kaohsiung to Ulsan.

Business remains slow southbound on the parcels front, with just small lots of methyl tertiarybutyl ether seen from Daesan, South Korea, to Singapore and some linear alkyl benzene to Ho Chi Minh, Vietnam, from Taichung, Taiwan, noted. Larger shipments of caustic and sulphuric acid continue to take place, while 13,000-15,000 tons of clean petroleum was quoted from Huizhou, China, to Singapore, though most movements tend to be in larger sizes since freight levels in handy and medium range sizes have tanked.

Prompt space northbound is rather tight, but more because contractual nominations are a bit heavier than usual, while some owners have switched tonnage away from the area, while others were caught up in the aftermath of the typhoons in the north and have yet to reposition their ships back south. The next benzene requirements from Map Ta Phut, Thailand, have been quoted, with 6,000 tons to go to Jiangyin, China, and 9,000 tons for Kaohsiung, Taiwan.

Typhoon Podul has been the latest storm in the Southeast region, causing some damage as far up as Vietnam, with typhoons Lingling and Kajiki gathering strength and expected to affect ports as far up as Taiwan and Korea. A number of relet possibilities have come to the market as a result of delayed vessels, helping absorb prompt space. Clean petroleum, while not active has not been a flop either, with most regular ships having a voyage or two in hand. Biodiesel too has been busy into China. One thousand tons of base oils were noted from Rayong, Thailand, to Ciwandan, Indonesia, for the end of September.

Benzene continues to get done on the transpacific route, with 39,000 tons fixed from Korea to the U.S. Gulf, but spread over two ships, with levels in the low $40s/t heard. A further 9,000-12,000 tons of benzene appears to have been booked too. Part-space is scarce for September. Eighteen thousand tons of sulphuric acid is rumoured to have fixed from China to Puerto Cabello, Venezuela, for the second half of September.

The market to Europe is busy with biofuels of various sizes and grades. Owners remain bullish on rates to Turkey, with 1,000 tons from Ulsan, South Korea, to Gebze, Turkey, gathering levels in the $160-170/t region. Thirty thousand tons of sulphuric acid was noted from China to the Mediterranean.

The regional markets are a little quieter this week. Indian ports have tightened security following advice from intelligence networks this week about a possible terrorist infiltration. Eastbound has been steady, with cargoes such as 10,000 tons of methyl tertiarybutyl ether from Mesaieed, Qatar, to Port Dickson, Malaysia, and to or Malacca, Malaysia, covered, as well as 10,000 tons of ethylene dichloride and methanol to Haldia, India, and Merak, Indonesia, seemingly in the $40s/t. Aromatics from India have been busy too. Westbound continues to see interest in paraxylene and benzene, with space reported to be tight for September.

This report was originally featured in the September 4 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.