VLGC rates have slumped 30% after propane arbitrage deals proved unworkable between the US Gulf and Asia.
The Baltic Exchange's index of spot rates from the Middle East to Asia finished the week ending 17 June at $70.60 per tonne, or $29,750 per day.
This was down 33% week on week.
Clarksons Platou was quoting average spot numbers at $29,000 per day, compared with $41,000 per day the week previously.
However, ships fitted with scrubbers were still banking a premium of $14,000 per day on top of this.
Brokers said export cargoes were cancelled as trade opportunities dried up.
But a volatile market is already showing signs of a rebound.
As freight rates decreased, the arbitrage window reopened.
Brokers anticipate a short-term bounce due to a lack of vessels available for relet in the market.
Fearnley Securities said softer trends continued amid a lack of fixing activity.
Which way now?
Despite some improvements towards the end of the week, spot earnings on the Houston to Chiba route fell 37% over seven days to $28,356 per day, the investment bank said.
"There still seems to be some uncertainty as to where the market will move next, particularly given the volatility and uncertainty in the commodity markets," Fearnleys analysts said.
The investment bank said that, for now, the decline in product differentials seems to have come to a halt, likely adding some support.
The US-Asia price difference stood at $130 per tonne on Monday.
Last week, a Fearnleys shipping webinar aired a positive view on long-term VLGC rates.
Over the past two years, US volumes have grown, meaning longer voyages and increased congestion and inefficiencies, the Norwegian company argued.
“With high oil prices, we are seeing strong rate potential for many years to come,” senior LPG advisor Martin Kjendlie said.
He is forecasting rates of $50,000 per day for 2024 and 2025.
