VLGC rates are expected to rise further after the sector battled back from a muted start to 2023.

Clarksons Securities noted a “surge” in earnings in recent days, with rates hitting $58,000 per day for non-eco ships and $67,000 for those fitted with scrubbers.

This is a 65% increase from the recent low of $35,000 caused by the decline in Panama Canal waiting times and the impact of the US cold snap on arbitrage profits.

“The reappearance of arbitrage opportunities has resulted in an increase in earnings,” Clarksons Securities said.

“Shipping tonnage is projected to remain limited through the end of March; therefore owners expect the earnings trend to continue,” the investment bank added.

Fearnley Securities also reported two days of substantial gains following a depressed start to the year due to a ship supply overflow and refinery maintenance in the Middle East, which contributed to lower cargo levels.

The balance between vessel supply and a strong price arbitrage window between the US and Asia has shifted in the last few days, its analysts said.

Fearnley Securities also still believes that 2024 could be another super-profitable year for VLGC owners.

US-listed VLGC company Dorian LPG has updated the market ahead of fourth quarter results, putting revenue at between $101.9m and $103.9m.

Fearnley Securities estimated a VLGC rate of $51,600 per day for the period, based on these figures.

Ebitda could be around $73m, the investment bank said, which would be ahead of consensus at $70m.

Dorian has 13 ships fitted with scrubbers, allowing it to save money on fuel.

Analysts believe further one-off cash distributions could be coming for shareholders, due to the modern fleet and a cash position of $140m after the third quarter.

Utilisation rates for the owner were 97.8% in the final three months of 2022.