VLGC rates turning the corner?

VLGC earnings were in a down trend, however, this week started showing some improvements. The Baltic Exchange reported a significant decline in earnings on 01st February, with daily rates dropping to $10,534/d for the MEG to Japan route, which represents a 16% decrease within a single day and a significant drop compared to the record-breaking high of over $170,000/d reported in September, when high US exports and congestion in the Panama Canal were the major contributors to the elevated rates.

This week the Baltic assessment earnings posted $1,008/$ more on the BLPG1 rate, with a market that seems to be improving with more action from India. The current earnings situation caused concerns among Owners as posted rates were indicating to go below vessel’s operating rates benchmark of $8,000/d.

The arbitrage to Asia is narrow but hasn’t stopped activity altogether with a handful of new fixtures reported so far this week.