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Long delays at Indian LPG terminals tie up VLGCs, freight hits 10-month high

India’s large imports of LPG to meet festive-season demand in November have sparked heavy congestion at its ports, forcing some vessels to wait more than two weeks to discharge cargoes, VLGC fixtures from ship brokers showed, pushing freight to the highest in 10 months.

“There are delays and congestion at the ports. We have been seeing huge imports in the Indian market. The ports are getting busy on the discharge due to the volume of imports amid a rise in domestic consumption,” an Indian shipping source said.

“Domestic consumption in India is on the rise even while prices of LPG are going up and this is the major reason Indian importers are taking more LPG cargo imports in recent weeks and also to avoid inventory losses,” the source said.

“(It is) not unusual waiting time in India these days — three to five days in Haldia. But yes, some places we do have some delays… which of course helps on the shipping market,” another ship broker said, referring to the rise in VLGC rates from the delays caused by a combination of large imports and less than adequate port infrastructure. “It is not easy to fix out your ship coming ex-India,” he added.

India’s LPG consumption has been rising and hit nine-month highs at 2.49 million mt in October, as the country prepared for Diwali in November. Though imports in September fell 7.7% on the month to 1.57 million mt, these were from a record high of 1.71 million mt in August, according to data from the Petroleum Planning and Analysis Cell dating back to 1998.

In the first 10 months this year, India’s LPG consumption totaled 23.076 million mt, up 2.52% on the year, PPAC data showed.

Freight rebounds

Up to the the third week of November, around 624,100 mt of mixed propane-butane LPG cargoes aboard 13 VLGCs were waiting at Indian terminals, including Mumbai, Haldia, Pirpau, Visakhapatnam, Kandla and Mangalore, fixtures showed.

The waiting times ranged between one day and two weeks, according to the fixtures.

The 58,123 Dwt BW Birch, fully laden with a Middle Eastern propane-butane cargo, has been waiting off Haldia for more than two weeks, according to the fixtures and Platts cFlow trade-flow analytics software.

The number of vessels peaked at 30 in the second week of November, waiting to discharge about 1.52 million mt of mixed cargoes off ports including Mumbai, Visakhapatnam, Pipavav, Kandla, Haldia, Pirpau, Mangalore, Dahej, Tuticorin, Porbandar and Ennore, the fixtures showed.

In the first week of November, about 1.08 million mt of LPG in 27 ships were waiting off India’s east and west coast ports, the fixtures showed. Congestion at Indian and Chinese ports, along with delays vessels face in transiting the Panama Canal, had limited the number of available VLGCs to move cargoes during a high-demand season in Asia, sending rates on the major Persian Gulf- Japan route to almost six-month highs at $63.5/mt Nov. 16.

Though freight briefly eased to around $61/mt, as more trader relets emerged, levels rebounded to $66/mt Nov. 23, the highest since $69/mt on Jan. 25, as concerns over delays persisted amid healthy flows of US cargoes to Asia in December.

“(It is due to) long waiting times, and just generally bullish sentiment. We see this pattern all the time,” a third ship broker said. “While the Persian Gulf-Chiba route might be losing steam, I think Houston-Chiba will keep going,” he said, pointing to the busy schedules of US-to-North Asia shipments.

He said waiting times to transit the Panama Canal is currently about nine days for north-bound vessels and 15 days for those south bound, compared with the typical five to six days. Up to the Nov. 5 week, waiting times were around 18 days north bound and about 10 days south bound.

“Discharge port delays in India and the Far East are tying up potential ships and affecting itineraries as with the preference to place ships on a long-haul voyage where rates are typically at a seasonal high, leaving behind relatively fewer ships,” the third ship broker added.

Source: Platts

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