EXMAR: VLGC Market Levels Historically High

The VLGC market has reached and is maintaining historically high levels, based on first semester results of the EXMAR Group, owner and operator of LNG and LPG carriers.

 
According to the company, the recent freight upturn has been mainly driven by the arbitrage between US and Asian product prices, with the increased availability of product out of US Gulf, as well as other western loading areas remaining a major swing factor for the VLGC markets due to increasing tonne-miles.

Consistent all time high spot levels have supported increased Time-Charter activity for medium to even long-term deals. Fleet coverage for the balance of 2014 is 100%, of which 60% at fixed rate.

With respect to the midsize (MGC) segment, backed by a consistently firm VLGC but also LGC market and coupled with limited vessel availability, remained firm during the first half of 2014.

Whereas Indian LPG movements remain an important cornerstone, the company explained that “a high activity level in Atlantic Ocean and North Sea continues to offer a steady stream of employment opportunities for Midsized LPG Carriers.”

“The orderbook for fully-refrigerated 24 – 40,000 m³ tonnage currently stands at 23 vessels, which represents about 30% of to day’s existing segment’s capacity on the water. Fleet coverage for the balance of 2014 is 91%,” EXMAR said.

The small pressurized markets have remained under pressure for most of the past six months, due to weak petrochemical demand and signs of overcapacity for the markets both East and West of Suez, while at the same time a series of newbuilding vessels are due to enter the market during the coming months.

All these factors reflect a downward pressure for the small pressurized vessel markets.
Fleet coverage for the balance of 2014 is 65%, as detailed by EXMAR.

Small Scale LNG and LNG Bunkering

Following EXMAR’s  strategic partnership with the Antwerp Port Authority, both partners have completed the technical studies. The parties are currently working to further aggregate commercial demand for LNG as a ship fuel, with the aim of synchronizing the delivery of the LNG bunker vessel with that market demand.

Overall, the Executive Committee of EXMAR Group said that the group had a consolidated result for the first semester of 2014 of USD 51.7 million (USD 90.2 million for the year 2013; including the USD 54.2 million on the sale of 50% of EXMAR LPG to TEEKAY LNG PARTNERS).

The result of the group has been positively influenced by the capital gain realized on the sale of older LPG tonnage (approximately USD 24.5 million for the first semester of 2014) and the capital gain realized on the sale of real estate (approximately USD 1.5 million), EXMAR said.