Prospects are a little brighter for VLGCs following a tough September, according to analysts.
Clarksons Platou Securities noted that the spot market had come under pressure in recent months, but this has "eased a bit in the last week".
The investment bank pegged Middle East-to-Japan spot voyages at $22,500 per day on Tuesday.
The Baltic Exchange's assessment for the same route was $48.14 per tonne or $26,055 per day on Monday, up 51% month-on-month.
This is certainly an improvement after rates sank close to $10,000 in September, but earnings are still around 50% of what was achieved in 2020.
"As with the tanker market, the LPG carrier market is expected to improve gradually as Opec+ increases production," analysts Frode Morkedal and Omar Nokta said.
But the group's research arm, Clarksons Research, believes that with US propane inventories likely to remain low in the short term — weakening arbitrage dynamics — VLGC market potential upside could be limited.
This would fit the forward freight agreement market, which is trading only slightly above spot levels.
November contracts are being fixed at $53.50 per tonne, or $27,800 per day, from the Middle East to Japan, and at $54.50 per tonne, which is $28,900 per day, in December.
Fearnley Securities said rates had been relatively stable over the last week, with those from the US remaining $5,000 per day above Middle East numbers.
"Despite more ships being sent to the West to capture higher rates, there are still several trader/owner vessels available in [the Middle East] for last decade October/early November," the investment bank said.
In the West, all October positions were fixed and the focus is now on November freight.
More interest
Inquiries are increasing in frequency, Fearnley Securities said.
"With the arbitrage slightly more supportive, we believe there is scope for some higher freight near-term," the company added.
The big question mark for the market remains the US, where volatility is still the keyword as inventories remain well below historical averages, analysts Peder Nicolai Jarlsby, Erik Gabriel Hovi and Ulrik Mannhart argue.
Total inventories now stand at 72m barrels, down 0.6m barrels from the previous week and about 70% of the 2020 levels.
"Winter demand will be driven by weather in North America which will compete with export volumes over the coming quarters," the analysts added.
Tonnage list tightens
Cleaves Securities said the tonnage list for prompt cargoes is tightening from the Middle East.
"In the West, talks of trader relets are re-emerging as the US/Far East arbitrage is still unattractive," analyst Peter Michael Christensen said.
At the end of September, Avance Gas fixed three VLGCs on time charters at rates above spot levels.
The Oslo-listed company said agreements had been signed with unnamed charterers at an average of about $30,000 per day over two years.
The ships are the 83,700-cbm Iris Glory and Venus Glory (both built 2008) and the 84,000-cbm Promise (built 2009).
