Rates to haul LPG on very large gas carriers (VLGCs) on the benchmark Gulf-Asia Pacific route are touching USD100 per tonne again, as more tonnage is being diverted to the West-of-Suez.
As of 27 April, the Baltic Exchange assessed the benchmark rate at USD96.313/tonne, up from USD88.25/tonne on 20 April.
At current bunker prices in Fujairah, that works out to daily earnings of USD91,955.
“We see a number of ships ballasting to Houston, West Africa, and Algeria where tonnage is tight and rates are higher,” said a Singapore-based broker.
The broker told IHS Maritime that spot rates for Algeria-Japan and Houston-Japan are now around USD151.50/tonne and USD219/tonne respectively, supported by the short vessel supply. This compares with USD138.50/tonne and USD197.50/tonne respectively a week ago.
As an indication, South Korean LPG importer E1 fixed Morston for USD160/tonne to load in Bonny, Nigeria.
Pricing agency Oil Price Information Service, however, noted that activity in Asia has been quieter, as players await Saudi Aramco’s announcement of May contract prices.
Spot demand is expected to remain weak amid rising shipping rates, reported OPIS.
OPIS said, “Buyers are also passive as there is some perceived spot supply in the FOB market. Traders are trying to grasp the Far East [Asia Pacific] demand before going forward in the FOB market.”
A UK-based broker concurred with OPIS’ assessment. “With spot freight rates once again hindering many charterers’ ability to make a profit, they may defer loadings to later dates, or even cancel the cargo,” said the broker.
In Asia, it is the usual demand from Indian charterers that has been providing support, although the need to fix cargoes for loading in late May could provide momentum, especially due to congestion in India.
The UK broker said, “There’re six or so ships still queuing for discharge, resulting in charterers having to find replacement ships.”
Indian Oil Corporation ended up fixing Aurora Taurus for USD4.675 million for 28-29 April loading, compared to the USD3.6 million for an Astomos ship it fixed for loading at the end of May.