Eastern Pacific Shipping Orders LPG Carriers as Positive Sentiment Abounds

Hyundai Mipo Dockyard’s backlog of LPG carrier newbuilds has grown to 21 today as two more were added to the list by Eastern Pacific Shipping.  The Singapore-based firm placed an order today for a pair of 38,000 m3 LPG carriers, including two additional options for a total consideration of USD $102 million. The vessels will be delivered in March 2017 according to a statement by HMD.

Even as orderbooks continue to swell with 77 new vessels set for delivery by the end of 2016, LPG shipping firms continue to express optimism about the ability of the market to handle the additional tonnage while the LPG market cooks along at an all time high.

Odfjell notes in their first quarter 2014 earnings report, “We are in a structured process of assessing various sources of finance for the order of four 17,000 m3 LPG/Ethylene vessels (with up to four options), and are also evaluating potential sources of financing to fund further growth of our LPG/ethylene activities, including partnerships with industrial or financial stakeholders.”

Harry Vafias, head of LPG shipping powerhouse StealthGas commented last week, “Over the next two years we have already committed to grow the fleet by at least 17 LPG vessels and have significant financial firepower for further expansion… This is an opportune time to take advantage of the positive fundamentals in our core LPG sector, a low orderbook coupled with increasing product supplies coming out of the Middle East and the US that we believe will prove to be positive for the freight markets in the years to come.”

Avance Gas and BW LPG are also increasing their fleet sizes with eight LPG carriers on order apiece.

The following graphic from Avance Gas shows the recent performance of the VLGC spot market:

avance gas tce rates vlgc