AMPLE VESSEL SUPPLY PUTS PRESSURE ON VLGC RATES

摘要

Rates for VLGCs came under pressure during May as cargo demand was weak from major Asian countries, while vessel supply remained abundant. The Baltic index on the benchmark AG-Japan route averaged $29.60 per tonne, 8% less than in April. The situation in the west was no different as vessel supply remained ample in the region as well. Several export cargoes from the US were cancelled as arbitrage economics were poor, which eventually led to surplus vessels. Although arbitrage opportunities should open up again as LPG prices in the US will fall because of stock build-up, we still rule out any major improvement in the rates, and believe they will remain low throughout the year as the fleet will continue to expand. According to the latest orderbook, 28 additional VLGCs are scheduled to be delivered during the remaining months of the year.