VLGC Orderbook Stands at 13% of Global Fleet
The Very Large Gas Carrier (VLGC) order-book stands at approximately 13% of the current global fleet during third quarter of 2019, said Dorian LPG, the owner and operator of VLGCs.
An additional 36 VLGCs, equivalent to approximately 3.0 million cbm of carrying capacity, are expected to be added to the global fleet by calendar year-end 2021. The average age of the global fleet is now approximately 9.4 years old.
A continuation of the favorable commodity price environment, the ongoing increase in secular demand for LPG as a more environmentally friendly alternative to other forms of energy and forecast high levels of U.S. exports as evidenced by export capacity and pipeline investments are expected to provide support for VLGC demand going forward.
Meanwhile third calendar quarter of 2019 saw additional LPG demand, particularly for propane in the Far East region. The widening spread between prices in the U.S. and prices in the Far East region accommodated an increase in freight rates in the third calendar quarter of 2019.
The Baltic VLGC Index began the quarter at $79 per metric ton, falling to $52 per metric ton in August, before regaining strength to $69 per metric ton on the last day of the calendar quarter. For the fourth calendar quarter of 2019 to date, the Baltic Index has averaged $75 per metric ton.