According to MANA, The Baltic Exchange Liquefied Petroleum Gas Index, which assesses VLGC freight rates on the Middle East-Japan route, rose to a seven-month high of $32.14 per tonne at Monday’s close, from $28.82 at the end of November. It has rebounded from a low of $18.86 on August 8.
The rally started with charter demand from Indian companies for December liftings, shortening the tonnage list in the Middle East, Nowegian brokerage Fearnleys said.
What is more, with rising charter rates, some idle vessels may return to trading, Drewry warned in its latest Shipping Insight. In the current fleet, 46 vessels are lying idle, and most of them belong to the small coaster segment, its data shows. Five VLGC vessels are also in the idle state because the market for large vessels remains oversupplied.
“If this happens, with high fleet availability, charter rates may come under pressure again,” Drewry said.
On the demand side, worries emerge in the form of low natural gas prices amid the shale revolution.
US LPG exports for the week ended December 8 are expected to be about 800,000 barrels per day, with propane comprising 700,000 barrels per day of the total, according to government estimates.