VLGC freight rate recovered strongly in the second quarter, mainly supported by strong U.S. LPG exports, widening geographical LPG price arbitrage between the U.S. and the Far East, and the shipping delay caused by the closure of the Houston Ship Channel in March this year.
In the second quarter, U.S. LPG production grew 10.8% year over year, and domestic LPG consumption decreased seasonally, resulting in LPG inventory levels increasing 35.5% year over year. This supported an increased geographical LPG price spread, and U.S. exports reached the highest in history, driving up the VLGC utilisation and freight rate.
Global waterborne LPG trade reached 25.8 million tons, 5.7% growth year over year. Total LPG trade via VLGC reached 19.5 million tons, 10.2% growth year over year.
We have a positive freight outlook for 2H 2019 and 2020. In the longer term, we maintain our view that sustained U.S. LPG production growth and no further newbuild orders remain key to a balanced VLGC market.
Please see attachments for the full quarterly report and presentation.
BW LPG will host an investor presentation of the financial results at 10:00hrs CET today. The investor presentation will be made by Martin Ackermann (CEO) and Elaine Ong (CFO).
The investor presentation will be available via audio webcast which can be accessed at https://bwlpg.eventcdn.net/201908q2. The webcast will be available on BW LPG's website, www.bwlpg.com, as soon as possible after the presentation.
BW LPG is the world's leading owner and operator of LPG vessels, owning and operating Very Large Gas Carriers (VLGC) and Large Gas Carriers (LGC) with a total carrying capacity of over 4 million cbm. With four decades of operating experience in LPG shipping and experienced seafarers and staff, BW LPG offers a flexible and reliable service to customers. More information about BW LPG can be found at www.bwlpg.com.
BW LPG is associated with BW Group, one of the world's leading shipping groups. BW's controlled fleet of over 400 ships includes oil tankers, LNG and LPG carriers, floating storage and regasification (FSRU) units, chemical tankers, dry cargo carriers and floating production storage and offloading (FPSO) units.
This information is subject to disclosure requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act.