A long US Gulf Coast propane market and short tonnage lists pushed the tide higher for VLGCs sailing the Houston-Japan route at the start of the week.
Freight for the Houston-Japan run climbed $7 to $85/mt Monday, its highest level in over three years.
The route was last assessed at the same level on February 26, 2016.
It was last higher on February 19, 2016, when it was assessed at $95/mt.
“It is the highest in a long time,” a regional shipping source said.
Sources said an open arbitrage to the Far East combined with low butane and propane prices have pushed freight rates to a multiyear high.
“The price arbitrage between Mont Belvieu and the Far East reached record levels,” a second shipping source said. “It is at $132/mt for April/May.”
April propane and butane at the Enterprise storage facility rose 1.375 cents to 62.125 cents/gal and 1.50 cents to 73.50 cents/gal, respectively.