Gas shipping executive Oystein Kalleklev says record VLGC earnings are now up where they belong.
The chief executive of John Fredriksen-backed VLGC owner Avance Gas and LNG carrier company Flex LNG told TradeWinds that spot rates are “getting to LNG carrier levels”, and “That’s how it should be.”
Kalleklev pointed out that the arbitrage between the West and Asia is $330 per tonne.
The freight rate is $183 per tonne from the Middle East to Asia.
“So that is certainly supporting these rates. Everybody is making money, so everybody is happy,” he said.
The Baltic Exchange assessed VLGCs from the Middle East Gulf to Asia at $172,200 per day on Friday, up 128% over the past month.
LNG carriers are still out in front, however.
Tri-fuel diesel-electric vessels are assessed at $200,000 per day, while Clarksons pegs two-stroke ships at $257,500 per day.
Last week, VLGC spot rates continued to set astonishing records as Indian deals drove the market.
Brokers also said the US export sector remains strong, with earnings showing no signs of slowing.
Panama Canal transit delays are tightening the tonnage supply.
Clarksons Research said fresh highs were seen both east and west of Suez as exceptional market conditions continued.
“Cargo demand is outpacing vessel supply and the outlook appears bullish,” it said.
On the LNG side, “steady” market conditions were observed, with the sector taking a pause for breath and spot rates remaining flat week on week.
Workers at Chevron’s LNG export facilities in Australia agreed terms with the company last week, ending the threat of a prolonged shutdown.
