Europe too sees an influx of vessels coming back from India and Asia. Asia remains overtonnaged, but if the trend of sending ships back to the West continues, this may eventually be the one area in which to trade. Interestingly, we hear more and more owners who say they would rather ballast away or sit idle than accept the freight rates being proffered. The bottom has been reached on some routes, but with all this tonnage around it will probably bounce around until demand recovers.

U.S. Gulf of Mexico
The prophecy of more ships opening up in the U.S. Gulf at the end of July and early August is coming true. Most are of a larger size too, over 10,000 dwt, and in many cases over 20,000 dwt. Unless they are willing to parcel up, it is going to be difficult for them since most of the demand presently is for smaller cargoes. In fact, demand is fairly good for the small parcels.

From the U.S. Gulf to the Caribbean is quite tight, but the economics of putting a big ship on berth would be questionable. Rates for 5,000 ton cargoes from Houston to the east coast of Mexico are no more than the low-to-mid $20s per ton.

South America normally appeals to ship owners, but right now there is not much outward demand to place a ship on this route, and moreover there is not the volume of biodiesel and ethanol being exported from South America afterwards to really justify it.

Eastbound transatlantic has been fairly busy, with styrene and chemical parcels moving. Freights have not increased however, and are holding around $45 to $46/t for 5,000 ton lots from Houston to Rotterdam.

The U.S. Gulf to the Far East is another route that is active, but irrespectively rates are falling. The view is that demand going forward may decline, in which case some owners with August ships will be willing to discount to ensure the ships are booked in advance. Currently 5,000 ton cargoes from Houston to principal scheduled ports in the Far East go for the upper $60s/t. This may drop in August.

U.S. Gulf to India is perhaps the tightest of all the routes, with scheduled space scarce through most of August. Rates are fairly firm for 5,000 ton cargoes to Mumbai, paying around $95/t. If there is sufficient cargo, the bigger ships may be lured on berth, which might cause freights to dip.

Europe
Most European short-sea trades are fairly hushed this week. Most owners have so far avoided being lumbered with ships and having no business in hand. However, more ships are edging towards a prompt position which in turn heightens the competition for cargoes.

Southbound into the Mediterranean has probably been the busiest of the intra-European trades. Several ships can nevertheless offer prompt space, and for 3,000 tons of base oils from Antwerp-Rotterdam-Amsterdam to the Eastern Mediterranean, the numbers would probably end up at around $45 to $50/t.

Transatlantic westbound is quiet with ample space available. From Antwerp-Rotterdam-Amsterdam to the U.S. Gulf, 3,000 tons of base oils would typically fetch around $50/t, depending upon the actual ports involved.

Business to Asia is diminishing steadily, at least for larger cargoes. July space is tight, but August space can be found, and it is with those ships where the bargains are likely to be found. Volumes on the Europe-to-India leg are steady, and rates for 5,000 ton lots are holding around the upper $70s/t.

Asia
The number of outstanding open positions in Asia has been whittled away substantially, and it now looks much more like the normal amount of ships open. With fewer cargoes coming through from Europe and the United States, it is conceivable that Asian markets will tighten further. However, aside from palm oil, there is not much in the way of chemical demand right now to deplete the ranks further.