A declining VLGC market is starting to divide in two along geographical lines, analysts argued on Thursday.
Asian markets remained weak, but there are signs of life in the US.
The Baltic Exchange's VLGC index stands at $24.14 per tonne or $10,628 per day, down 53% from this point last month, but actually up on 1.8% from the previous day.
Despite two days of gains, rates are only marginally better, Fearnley Securities said.
The investment bank added the eastern market continued in the doldrums, with rates effectively only covering operating and administration costs.
"Another big uncertainty is the waiting time and what the actual sailed-in time charter equivalent earnings are," Fearnley's analysts said.
Brokers said the only activity has been a couple of requirements heading for India, while the tonnage list remains long with ships available from both traders and owners.
"Looking ahead we do not expect to see much activity from Indian majors for the balance of June as spot demand continues its muted tone with the country already dealing with a big backlog of VLGCs waiting to discharge," the analysts added.
Fearnley noted a "slightly more positive undertone" in the west, as several charterers entered the market to secure ships.
"That said, fundamentals remain the same, with arbitrages swerving around cancellation territory and global loading figures coming down despite continued influx of tonnage," the bank added.
Small spot list
The number of open vessels from the US Gulf in July is relatively low, however, with the majority of relets available from the end of the month.
"Similarly, there are uncovered cargoes which combined should provide some support to rates," Fearnley said.
Cleaves Securities, another investment bank, said spot rates had plunged 85% year-on-year.
Numbers are now below rates for late June in both 2019 and 2018.
"The market is now so weak that many prefer [the] Cape of Good Hope [route] rather than Panama going Atlantic to Far East," Cleaves said.
