Saturday, June 3, 2023
HomeGasVLGC rates retreat as bunker prices ease, but volatility a concern

Subscribe

To our FREE newsletter
Get all the latest maritime news delivered straight to your inbox.

VLGC rates retreat as bunker prices ease, but volatility a concern

Very Large Gas Carrier rates retreated from a near two-month high as bunker fuel costs eased, while LPG shipping fixtures slowed after a recent flurry, shipping sources said March 18.

The benchmark FOB Singapore marine fuel 0.5%S cargo assessments fell to $788.18/mt March 17, from $786.03 March 16. Outright prices of Singapore-delivered marine fuel 0.5%S skyrocketed to an all-time high of $1,027/mt March 9 since S&P Global Commodity Insights launched the assessment in July 2019. The outright prices were last assessed at $805/mt March 17.

The benchmark marine fuel price averaged $746.07/mt over Jan. 3-March 17, up from $480.64/mt in the year-ago period. The price averaged $606.51/mt in the fourth quarter of 2021.

Rising bunker prices have slowed demand in Singapore since February, as shipping companies minimize requirements for impending voyages, or divert inquiries to regional ports, such as South Korea and China, for competitive spot prices, market sources said.

Shipowners are also more likely than ever to skip bunker-only calls amid higher freight rates and opt for refueling at end-destinations where cargo works are scheduled, Singapore-based traders said.

“Though there are low-sulfur fuel oil fixtures when crude oil prices are lower, buyers also retracted inquiries in anticipation that prices would drop further,” a Singapore-based bunker supplier said.

VLGC rates on the major Persian Gulf-Japan route fell to $63/mt March 17, after reaching $65/mt over March 14-15, the highest since hitting $74/mt Jan. 17, S&P Global data showed.

“[VLGC] Prices are coming off hard,” a shipping source said. “I see spot rates around $62/mt, and maybe slide to $60/mt.”

Volatile bunker

Charterers are closely monitoring bunker prices in the wake of forecasts of looming global oil supply shortages and growing pessimism over the slow progress in Russian-Ukraine peace talks, another shipping source said.

“The market appears to be waiting on the Saudi (April-loading term) acceptances which are understood to have a potential for additional spot availability,” shipping brokerage GFI said in a report March 17. “The tonnage list is beginning to stack up, causing the Baltic to ease a little, so it remains to be seen if activity will pick up over the next week.”

The shipping market has been pretty active, with about 32 fixtures over the last two weeks, the second shipping source said. “About 17 are ex- Arabian Gulf, the rest ex-US Gulf with usual options for Asia and the West, but mostly for Asia,” the source said.

Sentosa Ship Brokers said in a report that three VLGCs were waiting to unload mixed propane/butane cargoes at India’s Kandla port, one at Mundra, one at Dahej, two at Mumbai, three at JNPT, four at Mangalore, two at Ennore (Kamarajar), two at Vizag and 10 at Jetty 17-18 in Haldia.

BW LPG, a unit of shipping major BW Group, said that bunker-price shocks, along with changing trade patterns, unexpected LPG inventory, management, and changes to shipping inefficiencies could spark near-term VLGC rate volatility, while the Russia-Ukraine crisis clouds the market in 2022.

BW LPG said in its Q4 and 2021 report that 2023 onward it remained confident about the long-term VLGC market because LPG is a viable transition fuel for decarbonization, despite uncertainties due to a heavy newbuildings delivery schedule and the implementation of IMO Energy Efficiency Existing Ship Index regulations. BW LPG also said there will be lower fleet supply because of the high number of ships put in dry docks for maintenance in 2023.

“I really don’t see dry-docking will have a big effect on shipping this year,” another VLGC shipping source said. “For drydocking in 2023, I also don’t think it will have a major effect on the market, as new buildings are starting to come out that year, even though they are fairly spread out through the course of the year.”

The global VLGC fleet will grow to 340 ships in 2022, 378 ships in 2023 and 381 ships in 2024, BW LPG said in the report.

Source: Platts

Related Posts

Video

Finance & Economy
Shipping News
Ports

BW LPG appoints new CFO

BW LPG announced that it has appointed Ms Samantha Xu as Chief Financial Officer (CFO), effective 1 September 2023. Ms Xu has over 20 years...

Frontline Posts Highest First Quarter Results Since 2008

Frontline plc reported unaudited results for the three months ended March 31, 2023: Highlights Highest first quarter profit since 2008 of $199.6 million, or $0.90 per...

Diana Shipping posts slightly lower Q1 profit; takes out $123m in loans

Diana Shipping reported net income of $22.7 million and net income attributed to common stockholders of $21.3 million for the first quarter of 2023....

CMA CGM Profit Eases as Container Transport Demand Wanes

CMA CGM expects its profit to ease further for the rest of the year after a first-quarter decline, as an uncertain economy and influx...

Seanergy ‘well positioned to benefit from positive trend in Capesize market’

Seanergy Maritime Holdings Corp., announced its financial results for the first quarter ended March 31, 2023, and declared a quarterly dividend of $0.025 per...

Taiwan Shipping Firms Set to Hand Out Bumper Bonuses Again

Taiwanese shipping companies are handing out bumper mid-year bonuses despite a slump in global...

Baltic index hits over 3-month low amid lower coal imports

The Baltic exchange’s main sea freight index extended losses for the 15th session straight...

Baltic index falls for the month as vessel demand wanes

The Baltic exchange’s main sea freight index recorded its first monthly decline in four...

North Korea missile tests endanger shipping, UN maritime agency told

North Korean missile tests are endangering the safety of commercial shipping in busy sea...

Singapore Clamps Down on Tankers as Dark Fleet Grows

Singapore’s detentions of oil and chemicals tankers have surged since early last year, highlighting...

DP World Completes Terminal Expansion Project Vancouver Port

DP World has completed the AED954 million ($259.78 million) Centerm expansion project, increasing container throughput at the Port of Vancouver by 60 percent. The terminal...

DP World completes AED 954 million Vancouver port expansion

DP World and the Vancouver Fraser Port Authority have celebrated two historic events – the completion of the Centerm Expansion Project at DP World...

Alexandroupolis port gets 24 million euros of EU funding

Greece has secured 24 million euros ($26 million) in European Union funding to upgrade its northern Aegean Sea port of Alexandroupolis, privatisation agency HRADF...

Port Hedland Iron Ore Exports Down 5% in April

Pilbara Ports Authority (PPA) has delivered a total monthly throughput of 57.7 million tonnes (Mt) for April 2023. This throughput was a two per cent...

APM Terminals Reveals $1 Billion Investment in Brazil

APM Terminals’ CEO Keith Svendsen has pledged an investment of about US$1 billion in the company's Brazilian operations up to 2026. The amount includes around...