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VLGC Market Tightens as Asia Demand, Canal Congestion Drive Rates Higher, Vortexa Says

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-- Very Large Gas Carrier freight rates surged to $244.8 per metric ton as US liquefied petroleum gas exports hit 2.8 million barrels per day in April, lifting shipping costs, Anna Zhminko, Associate Market Analyst at Vortexa, said in a Thursday note.

Shipowners repositioned up to 150 VLGCs to the US Gulf Coast by mid-March, driven by strong export demand during the Middle East conflict.

By April 30, ballast VLGC volumes heading to the USGC normalized to January 2026 levels, even as export volumes reached record highs at 2.8 million b/d, Vortexa said.

US LPG exports to Asia climbed to a record 1.7 million b/d in April, rising 21% over the month and reinforcing US market share amid tighter Middle East supply, the note added.

Shipments to Northeast Asia rose 23% over the month to a seasonal record 1.1 million b/d, with nearly one in 10 cargoes rerouted via the Cape of Good Hope, according to Vortexa.

Panama Canal congestion intensified, pushing 40% of US LPG cargoes to Asia around the Cape, while Neopanamax transit costs rose nearly fourfold to $1.076 million on April 29, Vortexa noted.

Freight rates on the BLPG3 route climbed to $244.8 per metric ton on April 29, matching late-2023 Panama draft-period highs despite ongoing fluctuations in vessel availability, Vortexa added.

Strong demand, extended voyage durations exceeding 20 days via the Cape of Good Hope, and persistent Panama Canal congestion are continuing to support elevated freight levels, Vortexa said.

About 13% of the mainstream VLGC fleet moved into ballast positions in the Atlantic Basin as of April 28, up 3 percentage points from the January 2026 average, the note added.

This shift in fleet positioning points to sustained strength in US LPG export volumes into May, even as longer routes and logistical constraints weigh on transit efficiency.

Middle East LPG exports, excluding Iran, held near 215,000 b/d in April, tightening vessel availability in the region and reinforcing upward pressure on freight rates, according to the note.

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