Three Indian state-run oil companies are taking four VLGCs on term charters this year to take advantage of three-year low freight rates and to handle rising LPG import volumes from the Middle East, shipping sources said this week. With the latest, a total of 14 LPG vessels have, or will be, taken on time charter by Indian Oil Corp., Hindustan Petroleum Corp. Ltd. and Bharat Petroleum Corp. Ltd., sources said.
These comprise nine VLGCs and five medium or large gas carriers. BPCL on Tuesday closed its bid for a VLGC time charter for a two-year period, with extensions for six-plus-six months, sources said. The laycan starts June 1-30. Among vessels said to be put on offer include Global United’s Benny Princess, as well as vessels from India’s Great Eastern Shipping, BW LPG, Phoenix, Dorian, South Korea’s KSS Line and the VLGC EverRich 10, shipping sources said.
Most of the offers could be in the mid-to high-$20,000’s/day, though one of the vessels could have been offered at around $35,000/day, sources added. “It’s India business, terms are tough. It’s a full-time job running term charters for Indian companies,” said a shipping source, adding that it is difficult to determine the term charter amount. The three other new term charters are for one year, with a one-year extension, and for two years, sources said. “The reason is the market is low and in case it picks up, it hedges them from the risk,” another shipping source said, referring to the recent pick up in term charters.
The newest VLGC charters were said to have been taken at around $37,000-$42,000/day. These were down from IOC’s charters of two BW LPG vessels in February at $50,000/day and BPCL’s charter of Great Eastern Shipping’s Jag Vishnu, in December 2015 at $55,834/day. However, a number of VLGCs were chartered in 2014/2015 at around $31,000-$46,200/day. Sources said some Indian importers had been grappling with high term charter rates concluded in the past two years. But spot rates on the major Persian Gulf-Japan route have plunged 81% since last year’s peak around mid-July to about $25.50/mt Wednesday, the lowest since February 2, 2013, Platts data shows.
HIGHER INDIAN IMPORTS
Indian term lifters have increased their term import volumes from Saudi Arabia to nine to 12 cargoes of varying sizes per month this year, up from about five to 10 shipments of varying sizes in 2015, market sources said. Some 10-12 vessels carrying cargoes ranging between 8,000 and 44,000 mt for a total of at least 226,000 mt were loaded in April, shipping sources said. Another trade source said even though the number of vessels that lifted Saudi cargoes in March were less than in April, overall volumes were higher as the VLGC Chaparral had lifted a large 48,000-mt cargo from Ras Tanura over March 20-22 and has arrived in Haldia on the Indian east coast last week.
Shipping sources said Chaparral has been put on subjects by Naftomar to lift a cargo from the US Gulf Coast during May 25-26, possibly to move to North Asia. Indian shipping fixtures are also showing a pick-up in discharging activity in April. Around 16 vessels carrying cargoes ranging between 6,000 mt and 20,500 have arrived, or due to arrive so far this month on the west coast ports and 11 ships with 9,870-25,000 mt cargoes have, or are scheduled to, arrive on the east coast ports.
India’s LPG imports are forecast to jump to 11.4 million-11.8 million mt in fiscal 2016-2017 (April-March), up by around 1 million mt from projections for fiscal 2015-2016, as a 7.6% year-on-year rise in demand to 19.36 million mt in fiscal 2015-2016 outstripped domestic output, industry sources have said. To help meet growing import demand, Great Eastern Shipping, India’s top private sector shipping firm, this week bought the 1996-built VLGC Gas Vision, due for delivery in the first-quarter of the current fiscal year. Shipping sources said the 76,931-cu m vessel was owned by South Korea’s KSS Line Ltd. and was sold at around $27 million. Chris Jones Authentic JerseyShare This