U.S. Gulf of Mexico
Quite a lot of tonnage is accumulating in the U.S. Gulf in May which is having a negative impact on freights in most directions out of the United States. The one exception is the Gulf-to-east coast of Mexico lane where contractual demand is fairly solid.

There are ships now interested in going on berth to the east coast of South America, the levels for which are dropping into the mid-to-high $40s/ton for 5,000 ton cargoes, but spot business is very hard to locate and it remains to be seen how successful these vessels are.

Transatlantic eastbound was slow last week with just a few tentative enquiries for cargoes such as ethanol, acetone and styrene. However, the arbitrage for benzene has opened in the past day or so which might see some of the surplus space mopped up. Looking further ahead too, because there are not so many cargoes inbound from Europe, space on the way back may tighten again later in May.

Numbers have come off a little more on the major routes out to Asia. There is something like a surplus of 40,000 tons of space spread over a bunch of ships between now and the first week of May, and very little seems to be moving. It should be possible to fix 5,000 tons of base oils from Houston to Taiwan or Korea in the mid $40s/t on that basis.

Tonnage to India remains solid and we see unchanged levels from last week.

Europe
Continental routes are plodding away without too much change this week. A 2,500 ton cargo of base oils from Rotterdam to northern France will typically cost 13 to 15/t. Where there has been a touch more activity is into the Mediterranean, which is causing ship owners to re-evaluate rates a bit.

For example, one cargo of 3,000 tons from Antwerp-Rotterdam-Amsterdam to Spain was circulated and drew offers in the low 20s/t, but the business could not be worked firm, and the charterers deferred the shipment by several days. When the cargo was requoted, it was found that rates had firmed in the intervening period to the mid 20s/t.

Northbound from the Mediterranean has lacked any real strength, and inter-Med fixing has been lacklustre too.

Transatlantic rates fell away again due to poor demand, with some 5,000 ton cargoes from Rotterdam to Houston securing numbers in just the mid $30s/t. With plenty of space available, it is hard to see this number bouncing back up again unless there is a dramatic change in cargo volumes.

Europe-to-Asia however is attracting interest from the aromatics brigade, and ships are slowly filling. Vegetable oils and phosphoric acid to India are also accounting for some vessels that might otherwise have looked to go to the Far East. We see figures in the mid $80s/t for 5,000 tons of base oils from Rotterdam to mid-China for example.