VLGC owners have seen the second longest bull-run in history come to an end but analysts believe there is plenty more to come from the recovering market.
Rates for the largest LPG carriers have been climbing consistently for the past month but lost a little ground yesterday to snap the winning sequence.
Spot earnings slipped to $48,100 per day on Thursday, still well above the $19,800 per day average in the year to date, according to Clarksons Platou Securities.
Nicolay Dyvik of DNB Markets said: “The drop coincides with a slight dip in the US-Asia propane arbitrage from yesterday as the oil price rally took a breather.
“We also hear VLGC cargoes have been fixed well in advance of liftings, which could lead to some near-term headwinds for the spot rate, while the underlying seasonality pattern does not peak before July/August.”
Petter Haugen of Kepler Cheuvreux stressed there was no reason for owners to worry about the end of the climb.
“Yesterday was the first down-tick for the LPG spot rate after 24 days with continuously increasing rates,” he said.
“This is the second biggest bull-run in the history of the Baltic Exchange spot rate,” he said noting rates had climbed from around $13,000 per day at the beginning.
"We do not believe this first down-tick in spot rates after a good run should be interpreted as anything significant," the analyst said.
“There is still ample willingness to pay for seaborne transportation of LPG between the US and Asia, supported by the still very good momentum in underlying US propane data.”
