The VLGC spot market has dropped like a stone over the past few days as traders placed chartered-in vessels onto the market, according to Clarksons Securities.

The Baltic LPG Index has fallen 22.8% since Friday to more than 11,300 points on Wednesday, marking its lowest level since the beginning of September. The figure represents an average spot rate of about $113,000 per day, after the market peaked at a record high of almost $170,000 per day in late September.

The Baltic Exchange’s average spot rate for VLGCs sailing on the benchmark route from the Middle East Gulf to Japan has plummeted 33.8% in the same time frame to just under $96,300 per day to hit its lowest point since late August.

“VLGCs earnings have in the last few days experienced a dramatic correction, with earnings now standing at $90,000 per day,” Clarksons Securities analyst Frode Morkedal wrote in a note on Wednesday.

“According to brokers, the sudden correction is due to an influx of trader relets into the spot market. Even though rates have fallen significantly, earnings come from all-time high levels and remain elevated.”

Clarksons noted BW Group’s intent to capitalise on the firm market by selling $92m worth of shares in BW LPG on Tuesday, as reported in TradeWinds.

Though the market has actually been falling steadily since late September when the index reached almost 17,000 points, current trading activity suggests that it may stabilise in the near term as the spreads between LPG prices remain wide, Jefferies analyst Omar Nokta said.

“As we noted previously, regional LPG price differentials have narrowed but remain very wide by historical standards and are likely to keep VLGC demand elevated,” he wrote in a note on Wednesday.