Rainfall this autumn will decide whether canal limits tighten again in the first quarter, which would keep VLGC supply tight.

Canal limits continue to extend VLGC voyage times
The Panama Canal remains the main route for US LPG exports to Asia, and its limits continue to support VLGC earnings. The Panama Canal Authority has set capacity at 33 daily transits since 15 October, including 10 slots at the larger Neopanamax locks that VLGCs use, and says a booking is the only way to guarantee a transit date. Clarksons links last week’s firmer VLGC market to canal delays and limited vessel availability in the US Gulf for early December. One-year timecharter rates were just under USD 100,000 per day, according to Clarksons.

Autumn rainfall decides canal capacity in the first quarter
The Canal Authority has said that rainfall from September to November will decide whether new restrictions are needed from January to March 2027. Its administrator has warned that a severe El Niño could reduce daily transits to 27 or fewer in the first quarter, compared with 22 at the low point of the 2023-24 drought, according to Lloyd’s List. Fewer transits would push more US cargoes onto longer routes and absorb more VLGC capacity, which would support both spot earnings and timecharter rates. The auction for long-term Neopanamax slots for January to April 2027, held on 17 November, will give an early signal of how much capacity shippers expect.

Sources: Clarksons Research, Lloyd’s List & Panama Canal Authority