US Gulf coast to Asia-Pacific LPG arbitrage economics and a tight shipping market have made US exports around either South America’s Cape Horn or Africa’s Cape of Good Hope uncompetitive. But the time-saving route through the Panama Canal has prompted a rise in the use of ship-to-ship (STS) product transfers off Balboa, on the Pacific coast of Panama (see map). A direct journey between Houston, Texas, and Chiba, Japan, should cost about $228/t based on the current very large gas carrier (VLGC) spot freight price of $101/t for the Mideast Gulf to Asia Pacific route, and take 40-45 days around the Cape of Good Hope (see p2). But the current spot freight price for the Houston to Japan route has been little discussed in the marketplace so far this year, because Asia-Pacific buyers have instead turned to spot freight assessments based on fixtures made to and from Balboa.
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