Charterers’ hunger to lock LPG carriers into period charters “bodes well” for the winter spot market, chairman Michael Jolliffe said after StealthGas revealed that it scored seven deals for a year or more.
StealthGas said it signed a total of nine period charters or contract extensions as it reported second-quarter earnings.
“What is particularly noteworthy is that the majority of these charters were for relatively long periods. Two of the charters were for three years, and three of the charters were for two years, all with established names,” Jolliffe said during a conference call with analysts.
“This kind of activity certainly bodes well in terms of expectations, as fixing longer-term is normally a sign that charterers are looking to secure tonnage in a rising market ahead of any rises, whereas in a falling market, nobody is rushing to fix.”
He said the company has 85% of 2024 days contracted, with 55% covered next year. None of its ships are in the spot market.
The company has $220m in contacted revenue, not including joint venture vessels.
As with much of the energy shipping space, LPG carriers are in their summer slow season, but their owners have their hopes focused on the seasonally stronger winter market.
Since its previous earnings report, StealthGas has been busy putting its ships into longer-term contracts, and Jolliffe said it remains focused on minimal spot exposure.
The charterer of the 40,000-cbm Eco Oracle (built 2024) extended its contract for three years until January 2028.
The 3,512-cbm Gas Alice (built 2006) won a similar extension that locks the ship in until July 2027.
The 5,023-cbm Eco Invictus (built 2014) was extended for two years, until October 2026.
The 5,000-cbm Gas Cerberus (built 2011) won a new two-year charter that lasts until December 2026, while the 5,018-cbm Gas Elixir (built 2011) scored a deal that lasts until October 2026.
One-year extensions will employ the 11,000-cbm Eco Blizzard (built 2021) until October 2025 and the 3,500-cbm Eco Royalty (built 2015) until August 2025.
The 7,500-cbm Eco Alice (built 2020) won a three-month extension followed by a four-month new charter that will last until January.
Rate details were not released.
Meanwhile, Jolliffe said the company continues to keep 60% of its ships in European markets, as freight rates remain higher West of Suez compared with Asian markets.
“We will wait for a narrowing of the gap between West and East rates to move more vessels back in the area,” he said.
Chief executive Harry Vafias said exports from the US, the world’s largest supplier of LPG cargoes, continue to grow unabated, and the blow to that market by Hurricane Beryl has had minimal impact in the current quarter.
“The issue is now becoming whether the US will hit an export ceiling due to capacity constraints,” he said, noting that key players in that market are expanding capacity.
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