Freight rates for vLGCs rose sharply as from the end of the second quarter, reflecting lower ship availability in the Middle East Gulf. The tightness is linked to a combination of factors such as, an increase in East to West ballasting, longer turnaround times in port, extensive dry docking and a strong rise in uS exports.
The Baltic vLGC Index peaked in June at uSD 80 pmt or uSD 1.8 million per month Time Charter Equivalent.
27 LPG, Nh3 & Petchem
2012 2013
Mill. tonnes
0 5 10 15 20 25 30 35 40
N. America W. Europe N. Africa W. Africa ME Gulf Other
World LPG Trade Freight rates for MGCs and handy size ships also benefited from the surge in uS Gulf LPG exports. The handy ships even outperformed the largest ships due to a need for semi-refrigerated ships to export smaller parcels to the uS.
values of ships above 20,000 m3 rose sharply in the second half of the year, both for older and for modern tonnage.
The outlook for the LPG shipping market remains positive with expected strong growth in trade volume. Ship values are expected to remain firm.
(Source: Lorentzen & Stemoco Gas Report) LPGC Eeklo (37,450 m³)
28 LPG, Nh3 & Petchem
vLGC
vLGC owners have enjoyed rewarding rates since May 2013 and the sentiment in the market remained optimistic primarly West of Suez. The second half of the year was positively impacted by longer haul voyages reducing prompt vessel availability.
vLGC West of Suez remained the star performer driven by wide arbitrage windows both ex uS Gulf into Europe and Far East combined with Targa (Texas) adding as many as 4 vLGC cargoes to uS monthly LPG exports. In the East however, LPG prices ex Arabian Gulf have been conflicting with relatively weak Asia demand impacting the Baltic Freight Index from his summit in June.
vLGC spot rates demonstrated substantial volatility over the year subject to the swings in Middle East Gulf exports and slow steaming was widespread.
Midsize
The developments in the vLGC segment have positively affected the utilization of the MGC fleet and consequently the freight levels for the MGC segment. This situation remained constant throughout 2013.
There has been an evident shortage of vessels West of Suez and limited vessel availability East of Suez keeping the market tight The North Sea LPG trade which is committing 5 MGCs has faced full utilization and improved freight rates for spot voyages, as a result of Midsize, handysize and vLGC tonnage unavailability in the region.
Demand for Ammonia (Nh3) in the Far East was limited but compensated by the LPG situation East of Suez which was different. Indian time-charter and spot requirements have kept the MGCs well employed.
Pressurized
With 43 newbuild orders placed in 2013 from 3,500 m³ up to 11,000 m³ to be delivered in 2015, pressurized ordering has been gaining pace. on the other hand ninety 3,000 – 4,500 m³ ships are in excess of 20 years old.
Time-Charter levels remain stable for modern tonnage despite disappointing spot activity 2013 ended up on a less bullish sentiment compared to 2012.
HigHligHts 2013 And OutlOOk 2014
vLGC
The EXMAR vLGC fleet continued to perform at rewarding levels based on Time Charters related to niche business in India and a long-term relationship with our Japanese customers.
The vLGC FLANdERS HARMONy has been sold early 2014 and will be delivered to its buyers in the course of the second quarter of 2014.
vLGC rates have spiked to unseen levels representing a TCE in early April of close to uSD 100,000/day.
Midsize
EXMAR, together with its joint venture partner Teekay LNG (TGP), declared its options to build four additional Midsize LPG carriers at hanjin heavy Industries which brought the total of newbuilds for EXMAR LPG BvBA to 12 vessels.
The LPG/C ANTWERPEN (built 2005, 35,000 m³) was fixed with Petredec for a 6 month time charter commencing the end of June at rewarding hire level.
The LPG/C EUPEN (built 1999, 39,000 m³) was fixed with Shv for a 12 month time charter for trading LPG in the Indian ocean at rewarding level.
Ammonia volumes physically shipped consequently diminished and 2 more vessels changed grade from Ammonia to LPG. The LPG/C COURCHEvILLE and LPG/C BERLIAN EKUATOR have since then traded under LPG for Reliance supplying the Indian market. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
6000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
6000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
6000
29 LPG, Nh3 & Petchem
LNG LPG NH3OTHERS 41,4%
5,472,837 17,8%
2,349,325
39,7%
5,248,224 1,2%152,181
Negotiations on the sale of our older vessels have been ongoing.
The interest came mainly from Chinese, Turkish and Middle Eastern buyers. LPG/C TEMSE was sold early in 2014 and will be delivered during the first quarter to its buyers.
Negotiation for the renewal and newbuilding placement with PCS (Nh3 transportation) had started, implying the extension on LIBRAMONT and SOMBEKE for a period of 10 years starting in 2016 and an option for replacement of BRUGGE vENTURE.
Statoil (LPG transportation) issued a tender to Time Charter 2 eco-Midsize newbuilds + 1 eco-LGC for 5 firm years + 3 + 2 optional years each. Aside from EXMAR and Solvang, significant interest has reportedly been registered from other owners considering to build against this requirement. This contract was awarded to EXMAR early in 2014.
Pressurized
All vessels are currently committed on Time-Charters trading both East and West of Suez at rewarding levels with first-class customers.