VLGC rates have plunged 25% so far in May, with no sign of things improving.
Analysts said production cuts are now starting to bite for the big gas carriers, and the downward trend is set to continue.
Fearnley Securities pegs the market as $44,000 per day, still about $4,000 above the same period last year, but down from $60,000 earlier this month.
"Though rates are still at strong levels, we argue the market has been as good as it gets as we now are really starting to see the implications on the supply side."
The EIA has estimated weekly production numbers dropped a big 5% week on week and are down 9% year on year, due to US cuts.
"Given the size of committed volumes, we do see a clear risk of a substantial propane shortfall should we face a cold winter in a few months’ time," Fearnley Securities said.
"For the shipping market, the bull case would be production staying at the current trajectory (which in our view seems unlikely)," analysts Espen Landmark Fjermestad, Peder Nicolai Jarlsby and Ulrik Mannhart added.
"In that case, we would end the year at -1% production growth, which alone seems unable to offset the increase in tonnage hitting the water. On top is obviously production cuts from the MEG where we already have seen several cancellations."
Cleaves Securities said rates were down another 6% week on week, with Asian and UK holidays limiting activity.
"With regional LPG pricing differentials not supportive of US exports, concurrent with an ongoing decline in AG and US LPG production, we do expect earnings to gradually decline throughout this year," head of research Joakim Hannisdahl added.
Fearnley said the Eastern market has seen a number of trader relets which has increased competition among owners.
But they are facing a Baltic in decline and feel no pressure to fix until necessary, it added.
Brokers are noting that the lack of market activity has made it difficult to say how freight should be priced, but "we struggle to see rates turning ahead of Saudi acceptances next week," the analysts added.
In the west, the standoff between charterers and owners continues.
"The former cannot justify buying spot cargoes on the current netbacks whilst owners are seemingly finding it difficult to accept freight substantially below last done levels," Fearnley said.
The result is a long position list with several relets and an abundance of FOB cargoes for sale in June.
"There has still been no news of June cancellations, but in our view, it is just a matter of time, unless freight starts to give substantially. In addition, several ethane carriers entering the VLGC market does not exactly make things better for owners who are likely facing additional pressure in the weeks to come," the analysts added.
