BW LPG (NYSE:BWLP) has secured three-year contracts for two of its largest vessels, moving to insulate its earnings from a projected surge in global shipping capacity that threatens to cap freight rates later this year.
The Singapore-based shipowner, the world’s largest operator of Very Large Gas Carriers (VLGCs), entered into time charter-out agreements for the BW Tucana and BW Yushi starting in January 2026.
The deals lift the company’s fixed-rate coverage to roughly 35% of its fleet for the year at an average rate of approximately $43,500 per day.
The move aligns with a broader strategy to lock in 40% of fleet capacity through period charters or freight derivatives, providing a buffer against the "lumpy" nature of the spot market.
While $43,500 per day is well above the company’s cash break-even levels, it sits below recent spot surges, which saw Ras Tanura-Chiba routes briefly hit $74,000 per day in early February.