VLGC freight rates hit 16-month highs

VLGC freight rates hit 16-month highs

London, 23 May (Argus) — Freight rates on all three very large gas carrier (VLGC) assessments have hit their highest since 19 January 2021, buoyed by tightening vessel numbers in the Mideast Gulf and US Gulf basins.

The cost of freight for a VLGC moving from Ras Tanura, Saudi Arabia, to Chiba, Japan, reached $85/t on 20 May, up by $17/t since the start of the month. In the US Gulf, the rate for a VLGC loading from Houston to Chiba was at $132.50/t on 20 May, up by $8.25/t since the start of the month. And the rate for a VLGC moving between Houston and Flushing in the Netherlands hit $75.50/t on 19 May, up by $3.75/t since the start of the month.

The 16-month highs can be attributed to a tightening VLGC fleet — particularly as congestion in the Panama Canal and at Indian ports is keeping ships out of the market for long periods.

Waiting times at the Neopanamax locks in the Panama Canal have been on the rise recently, reaching their highest since mid-November 2021, prompting shipowners and traders to test alternative routes to ballast to the US Gulf including round the Cape of Good Hope or through the