South Korea’s SK Gas has made headlines by paying a record $5.3 million for a transit slot for its LPG carrier, the G. Spirit, scheduled for September 1. This payment, approximately 7.3 billion won, is the highest in Panama Canal transit auction history, surpassing the previous record of $4.6 million set by SK Shipping earlier this month. The G. Spirit, under the management of SK Shipping, is currently waiting on the Pacific side of the canal for its northbound passage.
Amid rising demand and a scarcity of available slots, the auction prices have surged, with waiting times for vessels reaching up to 11 days. Prior to February, the median auction price was around $55,000, illustrating the dramatic increase in competition for canal slots. Factors such as lower water levels due to dry conditions have contributed to reduced capacity; recent rainfall was 34% below average, prompting the Panama Canal Authority to cut transit slots starting September and potentially limit cargo capacities.
In light of disruptions to major trade routes, particularly due to the Iran war, demand for canal slots has intensified. Additionally, new rules prioritize LNG carriers in slot auctions, followed by LPG carriers, emphasizing the growing importance of these vessel types in the current market dynamics.
SK Gas, established in 1985 and based in Seongnam, commands a significant share of South Korea’s LPG market and operates extensive storage facilities.
