A rare VLGC demolition sale has failed to spark great optimism in the market despite expectations more gas carriers will follow it to the scrap heap.

JX Ocean of Japan is understood to have sent the 78,500-cbm Nichiyuh Maru (built 1989) for demolition in India.

Brokers say the ship has joined the 82,500-cbm Gaz Fountain (built 1986) as the only VLGCs to be sent for scrap this year following an end to a two-year boom in freight rates.

A price of $268 per ldt is being placed on the Nichiyuh Maru, which works out at $4.37m for the owner.

While gas market experts welcome the disposal of tonnage, one analyst following the sector says the demolition activity seen to date has been a drop in the ocean.

“There will be more scrapping but how many is not yet clear,” he said.

Christian Andersen, president of Avance Gas, told TradeWinds: “My attitude is that the number of old ships is too limited to have a huge impact.”

He counts two 1970s built vessels and five built in the 1980s that are still trading today.

“We are talking about seven or eight clear scrapping candidates and that won’t really make it or break it,” he explained.

“It’s always nice to see older tonnage leaving in such depressed markets but we have to include the early 90s tonnage in order to really make an impact.”

A further 19 VLGCs become demolition candidates if the VLGC scrapping line is raised to 1992, he says.

“That would help but the likelihood of scrapping ships built in 1992 and older if not very high, even in this depressed market,”Andersen said.

VLGC spot rates sat at $14,903 per day on Monday, according to analysts at DNB Markets.

In a report on Friday analysts at the Norwegian finance house noted improvements in the market had followed an appreciation in US propane prices.

“All in all; we continue to believe that the VLGC market is sufficiently tight to, from time to time, yield VLGC spot rates significantly above opex levels,” wrote analysts Nicolay Dyvik, Petter Haugen and Jorgen Lian.

"We currently model for VLGC rates of USD20k/day in 2017, a level which is close to the industry’s cash-break-even."