LPG Shipping Reverting to More Familiar Patterns After Gulf Crisis

Shipping markets, distorted by the Gulf crisis, are reverting to more familiar trading patterns. The conflict may have long term implications for the industry, but at least the immediate disruptions have subsided, particularly in the more specialized trades. In retrospect, the conflict had a greater impact on the specialized oil and gas trades than on the “mainstream” tanker and dry bulk markets.

In the LPG market, the Gulf factor has had the most profound effect on the smaller ships, which are primarily concerned with the carriage of miscellaneous petrochemicals. During the height of the conflict, importers in the Far East tended to stockpile chemicals in anticipation of possible shortages, giving an artificial stimulus to the market. But when hostilities stopped, industrial shippers, either with adequate or surplus stocks, also stopped importing. As demand flattened out, the market virtually collapsed, and a large number of ships switched to the “C4″ trades on the North Atlantic, involving the carriage of butadeine from Europe to the US Gulf, and propylene on the back haul leg.

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