Freight rates to ship LPG from the Gulf to Asia Pacific weakened last week as market players awaited Saudi Aramco’s announcement of June contract prices while the exorbitant freight rates deterred Gulf-Asia Pacific fixtures.
On 2 June, the Baltic Exchange assessed the benchmark rate at USD106.313/tonne, down USD1.125 from 1 June. At current bunker prices in Fujairah, that works out to daily earnings of USD102,449.
Rates for Algeria-Asia Pacific and US Gulf-Asia Pacific also softened to about USD185/tonne and USD272.50/tonne on 2 June, compared with USD188.50/tonne and USD277.50/tonne on 26 May.
Even then, some ships were fixed at a lower rate, suggesting further downward pressure.
TOTAL fixed Aquamarine Progress for USD171/tonne for a Bethioua-Asia Pacific trip while Indian Oil Corporation fixed Venus Glory at USD4.2 million for a Ras Laffan-India trip.
Reported fixtures show that ships were fixed only for Gulf-India and US Gulf-Asia Pacific trips.
A Singapore-based broker said, “Although nothing is really happening on the Gulf-Asia Pacific scene, rates remain high due to congestion in Indian ports. BW and the Helios LPG pool [run by Dorian LPG and Phoenix Tankers] don’t have available ships for this month as many of their ships are either stuck in Indian ports or busy carrying LPG from the west of Suez.”
A London-based broker concurred, commenting that aside from loadings in Algeria and Houston, Texas, and voyages to India, there have been no Gulf-Asia Pacific fixtures for two consecutive weeks.
Oil Price Information Service (OPIS) reported that spot propane and butane cargoes are available for July delivery, but there are no serious talks because buyers are not really in the market.
OPIS said, “Sellers were expecting premiums of at least USD80/tonne above the July contract price now and that seemed to be too high for buyers.”
Importers are also said to have sufficient stocks and term supply from their respective suppliers for now, and have no need to enter the market.