Spot rates surged 47 percent this month to $70.86 a metric ton, according to the Baltic Exchange, the London-based publisher of shipping costs. The benchmark rate will set a new all-time high, Miguel de Potter, chief executive officer of Antwerp, Belgium-based Exmar, said by phone today.
Expanding natural-gas output in the U.S. is creating more LPG as a byproduct while shipments of the cooking and heating fuel to Latin America rise on winter demand, de Potter said. Congestion at Indian ports also is tying up ships for longer, leaving fewer available to compete for cargoes, he said. While rates rallied for one to three months around this time in the past three years, the current increase will probably last longer, he said.
“Some of my colleagues are more bullish this year because of the additional exports out of the U.S. and the additional imports into Latin America,” de Potter said. “It will definitely break the record.”
Rates reached $81.64 in July 2008, according to the exchange. The U.S. produced a record 29.8 trillion cubic feet of natural gas last year and exported 71.9 million barrels of LPG, according to Energy Department data. Shipments rose 15 percent to 5.9 million barrels in the year to February, the most recent data show.
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