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Weekly Market Report 7/2/20 – 14/2/20

NWE/MED

We have seen more activity for the smaller coasters this week however, there has not been enough to have an impact on current rates. Competition remains relatively strong between owners, but on the basis that we see the activity follow through into next week, we expect rates to slightly pick up then. Less relets are being pushed by traders. There have been some delays in North West due to bad weather, and the new storm “Dennis” might affect UK ports with floods during weekend/next week which may further tighten the market. Larger coasters have stayed busy with the steady flow of butane into Morocco.

SEA/FEAST

East pressurized market has kept a slow pace this week. It has been clearly a slow start for the Chinese market with the impact from coronavirus. China’s GDP is expected to slump from 6.0% in the previous quarter to 4.5% in Q1 2020, which is a lot more damaging than 2003’s SARS. In the petrochemical market, we have seen a few production reductions amongst South Korean naphtha crackers in response to demand reduction in China.

Despite some regional spot LPG activities, slow petrochemical activities have led to increasing idle time on vessels.

Chinese owners have also felt the pressure with reduced winter LPG movements and consequently increased idle time.

Time Charter Fixtures

Vessel CBM Charterer Period Delivery Laycan Hire

PGC Patreas 7,500 Aygaz 2 Month TC Med / Med 20-25 Feb HNR

PGC Periklis 7,500 OTI 3 Month Ext Ext (AG) Extension HNR

Sale and Purchase/New Buildings

New Buildings

Kawasaki H.I. have announced that Kumiai Navigation Pte Ltd (Singapore) have ordered a second 84,000 cbm with dual fuel LPG propulsion for delivery ex Sakaide Shipyard in Q1 2022. We understand that Kumiai are holding a technical option to add two 1,250 cbm deck tanks, which they did not exercise on the first vessel. The price is reported to be region US mill. We are not aware of any employment linked to this fresh order. Kumiai ordered their first 84,000 cbm D/F LPG at KHI (Hull no. 1748) speculatively and recently fixed her to Astomos for 5 years T/C, at a rate understood to be just sub- pcm. This vessel is slated for delivery in August 2021. It is interesting to note that all other orders of VLGC’s with D/F LPG propulsion which have been placed at Jiangnan (China) and HHI and DSME (Korea), are for larger designs (86-91k cbm), given the consumption of the LPG cargo as bunker fuel, whilst KHI have chosen to stick with the previous generation 84k cbm.

Second Hand

It has emerged that Geogas have concluded a Japanese sale and leaseback on their two 35,000 cbm’s, namely the SURVILLE (built 2014) & VARRAZANE (built 2013).

Further to earlier reports, Global United have sold the 75,300 cbm TAKAO GAS (built 1993, ex-GAS SAPPHIRE) to an unknown Buyer, believed to be Chinese, and has been renamed FABIO GAS.

Scrapping

The elderly 8,200 cbm ethylene PARNA BERLIAN II (built 1990, ex CHEMTRANS CHRISTIAN with 4,355 ldt), which achieved /ldt by virtue of nickel in her cargo tanks, arrived in Alang on 2nd Feb for beaching.

A combination of plentiful supply of fresh tonnage, especially large bulk carriers which have mainly been sold into Bangladesh, coupled with falling steel markets, have fueled some negative sentiment, leading us to reduce our assessment of a standard LPG vessel (no large quantities of stainless steel, nickel etc) by US/ldt to US/ldt in India, whilst remaining unchanged at US/ldt in Turkey.

Disclaimer:This market report is prepared in good faith, however a significant part of it is based on estimates and market rumors and therefore nothing stated in the report should be taken as a confirmed fact.
Source: StealthGas Inc.

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