Rates to haul LPG on very large gas carriers (VLGCs) have exceeded USD100 per tonne as most of the available ships for May loading have been snapped up.
The Baltic Exchange assessed the benchmark Gulf-Asia Pacific route at USD100.25/tonne on 5 May, up from USD97.313/tonne on 28 April.
At current bunker prices in Fujairah, this works out to USD95,376 in daily earnings.
Brokers told IHS Maritime that the shortage of tonnage has been exacerbated by ongoing delays in Indian ports and demand for loadings in West of Suez areas.
Norwegian broker Lorentzen & Stemoco said in a note, “Going forward, we expect significant tonne-miles and prolonged congestion in Indian ports to continue. While this will mean that freight will likely move further upwards in the short term, we have seen of late that at a certain freight level cargo cancellations become the more viable option as freight is prohibitive for trade, especially from the US Gulf. That being said, the volatility of the VLGC market remains; long-term predictions is more guesswork.”
Reported fixtures show Kuwait Petroleum fixed Progress for USD97/tonne for Mina Al Ahmadi, Kuwait, for discharge in Asia Pacific.
Demand from Indian charterers is steady. Bharat Petroleum fixed Everrich 8 for USD3.35 million for an Abu Dhabi-EC India trip. Hindustan Petroleum fixed Oriental Queen for USD3.7 million for an Abu Dhabi-WC/EC India trip and Indian Oil Corporation fixed Captain Nicholas ML at USD3.85 million for a Qatar-WC/EC India trip.
Pricing agency Oil Price Information Service noted that demand for Middle Eastern LPG has been lacklustre due to the high freight rates and that the freight levels have gone up only because of the congestion in Indian ports and arbitrage from the West of Suez to the Far East.
Spot vessel rates for Algeria-Japan and Houston-Japan firmed to USD160/tonne and USD229/tonne respectively, up from USD151.50/tonne and USD219/tonne on 28 April, encouraging ships to ballast from the Arabian Gulf to Algeria and Houston.