Despite volatile oil prices, US LPG export volumes are exceeding expectations and destinations are shifting, according to Dorian LPG.
On 4 June, the NYSE-listed owner reported a net income of USD8.8 million for its fourth quarter (which ended on 31 March 2015) versus a loss of USD1.3 million in the same period last year. Time charter equivalent rates surged 129% year-on-year, to USD52,618/day.
“Overall, US LPG exports are running at higher monthly levels than previously expected and are likely to reach close to 20 million tonnes per year,” said the company, which noted that the US exports’ share of global supply is 24% year to date, up from 19% in full-year 2014.
Dorian estimates that 29% of US LPG exports are currently being sent to Asia, 30% to Central/South America, 17% to Europe, and the remainder to multiple destinations under existing contracts.
The y/y decline in crude pricing “has not had any noticeable effect on demand for LPG shipping”, maintained Dorian.
“Based on continued export capacity coming on-stream in the US, we believe LPG prices will remain at very competitive levels while shipping capacity will remain in demand due to the increased tonne-miles,” the company affirmed.
Dorian has 16 ‘eco’ VLGC newbuilds due for delivery in 2Q15-1Q16 and a current fleet on the water comprised of six VLGCs and one pressurised LPG carrier.