Gersemi Research has published a very bullish report on LPG shipping prospects, suggesting shares for LPG listed owners could nearly double in the coming year.
The shipping equity research outfit is predicting the LPG shipping cycle is turning to expansion this year as supply growth turns negative and annualised demand growth continues around 10%. Gersemi Research also sees more US LPG available for export, a rising price differential between naphtha and LPG and stock building ahead of next winter. The company said it expects an imminent upswing in spot rates from this quarter and forecasts shares on average 94% higher in one year.
“Second hand LPG vessels are currently at trough levels and prices not seen since early 2004,” the company reported, while the LPG orderbook looks very low through to 2020.
Gersemi Research picked out Avance Gas as its number one stock pick in the LPG trades, followed by Dorian LPG and BW LPG.