Spot rates for VLGCs are on the cusp of hitting $100,000 a day, having hit highs in recent days not seen since August 2015.
Rates for large LPG carriers are now in the region of $90,000 a day, having been on a steep charge from last month. In terms of dollars per tonne, VLGCs are commanding in excess of $95 per tonne.
“With tonnage supply still extremely tight in both hemispheres, we wouldn’t be surprised if we see triple-digits $/t before Christmas,” Cleaves Securities noted in its most recent weekly report.
Ralph Leszczynski, global head of research at Banchero Costa, said spot rates of $100,000 a day are “absolutely possible”.
“VLGC rates are always very volatile and with plenty of spikes. When they rise then they rise fast and sharp, but turn around equally sharply when the momentum stops,” Leszczynski told Splash.
VLGC volatility is largely down to the fact it is not a very liquid market with few trading vessels and few charterers, so it takes little to disrupt the equilibrium.
As well as the normal winter season spike, driven by heating requirements in Asia, there is currently a heavy drydocking schedule for the VLGC fleet combined with significant congestion for Panama Canal transits, all pushing rates higher.
“Overall LPG seaborne trade has been sharply down this year, but the saving grace has been that the most resilient route is the longest haul one: US to Asia, with American exports to China back to very high levels after dropping almost to zero last year,” commented Leszczynski.
In terms of time charter rates, VLGCs are now at about $1.6m a month, which works out at about $55,000 a day, also the highest figure seen since 2015.