VLGC rates have fallen sharply as gas trading opportunities dwindle — and worse could be to come.
Earnings from the Middle East Asia to Japan dropped to $43,500 per day, or $64.10 per tonne, down 32% over a week, according to Baltic Exchange figures.
This came on the back of narrowing price arbitrage and improving passage conditions in the Panama Canal.
Broker reports suggest that rates could fall further this week given lengthy position lists on both sides of Suez.
Clarksons Research agreed market conditions were softer, and believes more drops are likely.
Weekly transits through the Panama Canal reached 206 last week, breaching the 200 figure for the first time since early November.
The Panama Canal Authority has said crossings will increase to 34 per day by 22 July on the back of improving water levels.
That brings transits much closer to the normal level of about 36 per day and well above the average number of 29 per day so far in June and the low of 22 per day in January, Fearnley Securities analyst Fredrik Dybwad said.
The Rim LPG Intelligence Daily noted that some operators with vessels were looking to relet them in the spot market.
Several fixtures were concluded last week.
Smaller markets under pressure
The 54,900-cbm Future Energy (built 2020), controlled by ENEOS Ocean, was reportedly fixed for a July loading at $64 per tonne.
Unique Shipping’s 84,000-cbm Oriental King (built 2017) was said to have been taken at a rate in the low $70s per tonne from Yanbu in the Red Sea into Asia.
Freight rates for the US Gulf to Asia route were down 25% at $49,600 per day.
“The market was weighed down by weak supply/demand of vessels,” Rim LPG said.
Market sources pointed out that while vessels were available, chartering demand for the first half of July loading was mostly covered.
Weakness in the two major export regions was also putting downward pressure on rates elsewhere.
Algeria to Asia fixtures were quoted down $2 per tonne to about $125 per tonne.
Ships loading in Yanbu for Mediterranean discharges were down $1 to $60 per tonne.(Copyright)
