The Baltic Exchange’s benchmark Middle East to Japan LPG route dropped to $76.50 per tonne on Monday, down by $1.75 compared to the beginning of last week. This decline in freight prices came as a surprise to some, as several days ago there had been talk about the benchmark route reaching an all-time high by surpassing the current record of $81.64 per tonne, which was achieved in July of 2008.
The drop also marked the end to an unbroken month-long rally which had been driven by growing cargo supply emanating from Middle Eastern countries.
“There is now some uncertainty about the value of the product and where it is going,” one London-based broker said.
Consequently, the broker said, charterers have adopted a cautious attitude, afraid to make costly mistakes by selling their wares in the wrong market and therefore reducing demand for VLGCs.