LPG carrier owners are not expecting a newbuilding shopping spree to tank the sector.
With rates at multi-year highs, Dorian LPG chief executive John Lycouris and Avance Gas finance head Peder Simonsen said they expect the market to remain steady on Capital Link's LPG webinar Tuesday.
"I think that the orderbook is reasonable, keeping people at bay from ordering more ships," Lycouris said. "We really do not need any more shipping at this stage."
The Baltic Exchange's LPG Index hit 78.857 Tuesday, the highest since October 2015 after spending much of the last four years in the 20's.
According to a note from Jefferies, charter rates for the largest ships are around $30,000 per day.
Lycouris said his ships were fetching rates of $60,000 per day, which he attributes to a shortage of ships.
He said the newbuildings set to enter the market this year — fewer than 20 vessels — would be absorbed into the market.
"I think the scrapping of older unites due to 2020 problems, ballast water treatment, etc. will keep the market to the levels of about 300 ships," Lycouris said.
"Ordering more ships, which is typical when the market starts going up, is not a good thing to experience. We've seen it before in 2015, [2016] with so many ships being built. We hope htis will not happen again."
Simonsen, also Avance Gas' interim chief executive, said the expense, plus uncertainty in technical details like propulsion systems would keep the orderbook more reasonable.
"There's enough ships already in the orderbook," he said.
Still, he said he does not expect the market to hit $100,000 per day like it did in years past.
"Maybe there will be more willingness from some to do more period business, levels will be more balanced than what we've seen in this market previously," Simonsen said.
