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LPG shipping stays weak on supply glut and tonne-mile demand changes: Epic Gas

LPG shipping stays weak on supply glut and tonne-mile demand changes: Epic Gas
The pressurised LPG shipping market continues to stay under pressure as a reduction in fleet growth in the last quarter has been overshadowed by the tonnage glut and changes to tonne-mile demand, according to Epic Gas.

The Singapore-based LPG specialist noted that the market “continues to bounce along the bottom” amid mixed sentiments.

“The very positive 45% reduction in net fleet growth for the (second) quarter when compared to the same period last year, has been offset by the overhang of legacy tonnage and changes in tonne-mile demand caused by repricing of commodities,” Epic Gas stated.

East of Suez, the surge in VLGC shipments of propane into Asia and the Indian Ocean continues to feed ship-to-ship lightering operations for last mile demand growth for pressurised LPG vessels.

Iran’s LPG exports continue to grow as the country builds a strong position in the region and wider international markets, Epic Gas noted.

In Asia, Chinese propylene imports picked up 25% in the second quarter, reintroducing demand for about eight to nine smaller pressurised vessels during the period.

West of Suez, the Black Sea and Mediterranean markets have delivered usual seasonality with reduced exports at the end of the heating season. North West Europe has also seen reduced activity after the end of the winter blending season leaving excess availability of both pressure and semi-refrigerated vessels.

US exports of LPG in the second quarter have continued to set new records. However, pressurised vessels have lost market share on the longer haul routes, especially those into West Africa and the Mediterranean, as traders are taking advantage of more competitively priced large vessels.

Epic Gas, meanwhile, has posted a first half net loss of $2.3m, narrowing from the loss of $4.3m in the previous corresponding period.

Revenue in the first six months stood at $64.8m, inching down from $66.3m seen in the year-ago period.