Dorian LPG's top executives described the ongoing surge in very large gas carrier spot rates as a short-term spike in a tight market that they expect to be continually rising.
Their comments came as the VLGC spot rates hit $46.64 per tonne on the Baltic Exchange, which is the highest level since October.
That translates to earnings of $30,500 per day day, the highest day rate since March 2016, according to Clarksons Platou Securities.
Dorian chief executive John Hadjipateras told TradeWinds in a video interview that the jump is a result of a closing gap between LPG carrier supply and demand, which is causing volatility in the market that drives sharp ups and downs in spot rates.
But the general trajectory for the VLGCs is in the upward direction.
"You get these ups and downs, but recent ups have been to a higher level and recent downs have been to a higher low," said Hadjipateras, who is scheduled to receive the Connecticut Maritime Association's Commodore award today.
"And the low that we had recently, which was unpleasant, in between October and now lasted much less than you might expect."
He said he thinks the market will keep moving upward, with volatility, "in a band that it is continuously rising".
Hadjipateras said LPG trade is expanding, and there are just 20 VLGCs scheduled to be delivered each year in 2019 and 2020, compared to 100 in 2016.
He and Dorian LPG USA chief executive John Lycouris both pointed to expectations for rising exports from the US to provide additional upside, once new infrastructure projects lift the current cap on flows from America's terminals.
Lycouris said the infrastructure limits will be sorted out starting later this year, leading to potential 10% to 15% growth in US exports in 2020.
"This year I think we're going to hit quite a good clip of growth, but we will be limited from that infrastructure, which will be improved toward the end of the year and into the next year, and we'll be able to see even higher number of exports coming out of the US for LPG," he said outside Dorian's Stamford, Connecticut, headquarters.
The Dorian executives are not alone in their optimism.
Analysts and shipbrokers are pointing to tight vessel availability across both the Atlantic and Pacific basins.
At the moment, charterers are not likely to find an open ship until May, and rising enquiries for that month point to increasing earnings, according to shipbroker Fearnleys in bullish language echoed today by Arctic Securities.
"We are still in the early innings of the seasonal upturn, and rates might well reach levels not seen since early 2016," said Arctic analyst Jo Ringheim.
As TradeWinds reported earlier today, analysts at DNB markets are predicting that day rates could top the $100,000 per day mark.
Yesterday, Fearnleys assessments showed earnings already at the $1m-per-month mark, a 31.6% change on the prior weekly assessment.
"The market is now awaiting ADNOC and Aramco acceptances, and only after this, they [charterers] will decide on their position and whether they will need to charter in or potentially relet their tonnage," the broker said.
