May saw rise in VLGC rates after April plunge

The LPG market strengthened through May, with VLGC spot rates climbing steadily. The benchmark Ras Tanura–Chiba route reached USD 52,600/day – up 25% from the 2024 average – while MEG–Asia earnings rose 24% week-on-week mid-month. This marks a strong rebound from April’s brief dip below USD 10,000/day, driven by firm U.S. propane exports, tight domestic storage, and increased activity in both basins.

New U.S. export capacity, expected online in the coming months, should boost freight volumes into Q3. Meanwhile, the temporary pause in U.S.–China tariffs has supported Eastbound flows and improved market sentiment. With steady earnings also seen on Houston–Chiba, VLGC fundamentals remain solid heading into the summer.

Ammonia trade supports long-term VLAC outlook
The ammonia segment continues to gain traction. Announced this month, Oman is positioning itself as a major green ammonia exporter, targeting 5.6 million tons annually by 2030 and over 30 million tons by 2050. Projects like SalalaH2, backed by long-term offtake deals, will drive long-haul trade to Asia and Europe – creating growing demand for Very Large Ammonia Carriers (VLACs).

This structural trend is reinforced by Trafigura’s recent order for four dual-fuel, ammonia-capable Mid-size Gas Carriers, set for delivery from 2028. These vessels, powered by ammonia engines, reflect growing confidence in ammonia as both a marine fuel and a global trade commodity.