West-of-Suez diversion may boost VLGC rates through Aug
VLGC rates have rebounded as more ships are fixed to load in Algeria, West Africa, and the US Gulf, despite weak demand in East Asia.
The Baltic Exchange puts the benchmark Gulf-Far East rate at USD135.50/tonne on 13 July, up USD1.50 from 10 July.
At current bunker prices in Fujairah, that means daily earnings for ship owners of more than US $139,000.
The rates are tempered, however, by sluggish demand in the Far East due to the summer slowdown and ample stocks in China, South Korea, and Japan.
According to pricing agency Oil Price Information Service, the removal of some vessels from the market has lent support to LPG freight rates.
A London-based broker is quoted by IHS Maritime as saying that rates will likely see sustained growth in the coming months as there have been enquiries for cargoes in early August, when tonnage will remain tight.
"We expect August to be another good month for shipowners," said the broker.
"There is likely still demand for vessels in August, particularly from West Africa and Algeria, keeping chartering rates strong,” Oil Price Information Service agreed.
Geogas fixed BW Aries for US $134.50/tonne while TOTAL fixed Morston for US $134/tonne for Gulf-Far East trips.
Indian demand continues to provide support for the freight market, with Indian Oil Corporation fixing Captain John NP for US $5.725 million on a lump-sum basis.
On 13 July, spot vessel rates for Algeria, West Africa, and Houston to Japan climbed to about US $220/tonne, US $225.50/tonne, and US $327.50/tonne respectively.
This was up from US $219.50/tonne, US $225/tonne, and US $327/tonne on 10 July.