VLGCs Falling Back

摘要

A fundamentally unhealthy combination of expensive FOB supply in the MEG and weak demand in the Far East markets sent the VLGC freight rates into a tailspin this month, resulting in the Baltic VLGC Freight index coming down some 30% since the start of the year. With the Saudi CP for January at USD 870 C3/USD 875 C4 and deals in the thinly traded Far East market concluded at levels around USD 800 pmt, it does not take much insight to understand that this climate is not very encouraging for traders. East of Suez, January started off with a decent MEG/Turkey fixture equaling some USD 46 pmt basis MEG/Japan, but from there on the going rate stayed in the USD low 30's pmt, a rate which, given today's bunker prices, is more or less the same the owners' operational break-even levels.