Rates to haul LPG on very large gas carriers (VLGCs) have exceeded USD110/tonne as charterers have been fixing ships in both the east and west of Suez.
As of 15 June, the Baltic Exchange assessed the benchmark Gulf-Asia Pacific rate at USD116/tonne, up from USD108.063/tonne on 8 June.
At current bunker prices in Fujairah, that works out to daily earnings of over USD115,000.
Pricing agency Oil Price Information Services (OPIS) said demand for LPG cracking over July is slated to remain firm as LPG is now cheaper than naphtha.
OPIS assessed the mean prices for naphtha (based on deliveries to Japan) at USD585/tonne, while that of LPG on the same basis is about USD527/tonne.
OPIS said, “Sources reckoned that more petrochemical refiners will emerge in the market.”
Continued congestion in Indian ports only mean that tonnage will remain tight, lending support to the freight market.
Reported fixtures show that SK Gas fixed Avance Gas’ Breeze at USD112/tonne for a Kuwait-South Korea trip.
Norwegian ship broker Lorentzen & Stemoco said, “Based on the interest we are seeing in the market and the available ships for the rest of the month and first half of July, it [the freight rate] looks like it will appreciate further.”