LPG spot rates climb as port delays tie-up tonnage
Port delays in Europe and North Africa last week prevented liquefied petroleum gas carriers from discharging cargoes, giving owners of vessels available for European coastal work confidence to increase spot rates.
Congestion in Moroccan ports with berthing delays of up to six days stopped gas carriers from returning to northwest Europe, while strikes in Le Havre, France, delayed vessel operations.
?There is a bit of a backlog and a couple of sticky patches that are causing some shipping delays. So there are not many candidates for spot or prompt cargoes,? a London broker said.
The freight rate for 3,500 cu m LPG carriers shipping 1,800 tonnes butane on the benchmark route of Teesside to Amsterdam-Rotterdam-Antwerp rose from $36 per tonne two weeks ago to $38 per tonne, equating to a spot rate of $8,500 per day. Brokers expect rates to climb above $40 per tonne if delays continue.
LPG carriers shipping smaller 1,800-tonne ARA cargoes to Portugal were earning around $70 per tonne, slightly up from two weeks ago.
?There are not many candidates, but if you asked a trader, Petredec or Vitol, for a relet they could do a more competitive rate,? the London broker said.
Shell exported extra spot cargoes from Stanlow, UK. It fixed two LPG carriers at undisclosed rates, including the 1991-built 3,200 cu m Sigas Ettrick to take Teesside propane to Belfast and the 2007-built 5,000 cu m Sigas Sonja to ship Stanlow butane to ARA.
Rates were also starting to improve for handysize gas carriers as owners took comfort from rising demand for transatlantic voyages.
Lorentzen & Stemoco said three handysize gas carriers were fixed to cover traders demand to ship US LPG to the Mediterranean to capitalise on arbitrage opportunities. Swiss trader Geogas fixed the 2008-built 17,000 cu m Clipper Hermes to ship Trinidad LPG to the eastern Mediterranean, loading on March 22, but the rate was not reported.
For very large gas carriers, shipping Middle East LPG to Asia, rates rose by $2 per tonne last week as exporters sold additional cargoes ahead of the expected price drop next month.
The freight rate on the Baltic Exchange benchmark route ? shipping 44,000 tonnes of Middle East LPG to Japan ? climbed by nearly $2 per tonne since the start of last week to a three-month high of 28.7 per tonne, equivalent to nearly $9,000 per day, yesterday.
Norwegian brokers said the 2009-built, 82,000 cu m Prospect gained the highest freight rate equivalent of the spot fixtures last week. It was fixed by Brazil"s Petrobras at a rate of $30 per tonne to load Middle East LPG on March 30.
Petredec fixed two VLGCs to load LPG in the first week of April for forward shipment to east Asia, including the 2003-built, 82,000 cu m Hellas Argosy at $29 per tonne and the 1999-built 78,500 cu m Yuhshu at $28 per tonne.
Rates rise fuels time charters
RISING spot rates for very large gas carriers after three months of poor market conditions has led to four ships being fixed on time charters in the last week.
AP Moller-Maersk paid the highest price when it fixed the 2008-built, 84,000 cu m Iris Glory from Gulf Marine for two years, starting in April at a rate of $450,000 per month, equivalent to $15,000 per day, brokers said. There is an option to extend the charter for a further year if required.
Another deal saw Maersk charter out a VLGC to Brazilian energy group Petrobras. The 2007-built, 82,000 cu m Maersk Virtue was fixed at a rate of $430,000 per month, equivalent of $14,000 per day for a one year period, starting next month.
Both time charters are more than 50% above spot market rates for VLGCs, which have stayed between $7,000 to $9,000 per day so far this year.
?The increase in spot business may have given some charterers more confidence to take short-to-medium term freight positions. However, spot earning levels remain extremely poor, still below owners" operating expenses and are a long way from remotely healthy levels,? Clarksons said in its weekly report.
Lorentzen & Stemoco also reported gas trader Petredec had fixed the 2008-built, 81,000 cu m Hellas Fos from Latsco Shipping for nine months and Dutch trader SHV Holdings fixed the 2008-built, 82,000 cu m Thetis Glory from Gulf Marine for two months, both at a rate of $9,000 per day.