Quantifying India’s LPG Shipping Delays

One of the striking features of the international LPG market in 2015 is the presence of the major Indian charterers, namely Hindustan Petroleum Corporation Limited, Bharat Petroleum Corporation Limited and Indian Oil Corp in the market. The aforementioned companies have fixed a total of 53 VLGCs between them this year at an average lump sum rate of USD 3.7 million per vessel, according to Poten’s records. India’s imports of LPG for the first half of 2015 were 14 percent higher than for the same period in 2014 as shown by official Indian government figures. The increased number of fixtures into India has been a factor responsible for inflated spot freight rates. So far in 2015, the Baltic Index has far surpassed expectations, climbing steadily from a low of $58.6/t in early January to a high of $137.9/t on July 15th. In addition, by mid-July, spot time charter equivalent (TCE) rates were at an historic high at over USD 4 million per calendar month. As imports into India have increased, many of vessels waiting to discharge their cargo into receiving ports have experienced severe delays. Port capacity constraints remain one of the key stumbling blocks to import growth in India. There are reports indicating that the country is using approximately 125% of its current port capacity. The length of the delay varies between ports, but the longest delay in June 2015 was more than 15 days. Click here to read full article