VLGC earnings are at the highest levels since February 2016 as ship supply in the Middle East Gulf drops following ballast movements to the US Gulf Coast.
The Baltic Exchange's assessment for spot freight rates to Asia settled just over $36 per metric tonne, equating to a time charter equivalent of around $25,500 per day.
As reported in Tradewinds, owners have been ballasting ships westward thanks to strong vessel demand in the US Gulf Coast for shipments to the Far East. Spot rates out of the US Gulf are said to be over $60 per metric tonne, according to one US-based broker, up from the high $50s per metric tonne earlier in March.
Charterers have been booking vessels farther in advance due to tight availability of slots through the Panama Canal. Early May cargoes are already being fixed, with one or two ships said to be available in late April.
BW LPG and the Helios LPG pool have been among those moving ships west to seek out better spot rates, the broker said. Spot voyages can provide an upside to earnings, but they also have contract-of-affreightment cargoes out of the US Gulf to fall back on.
Ship supply in the Middle East was also impacted as two major Indian charterers reportedly had to fix vessels in the spot market rather than getting vessels on time charter.
Whether rates will remain healthy remains unclear, the broker says. Stronger rates usually draw in traders who will relet their ships to others, putting a cap on rates.
