Chemical freight rates are not likely to return to pre-financial crisis levels anytime soon as there are still too many chemical tankers in the market, according to Italian broker Banchero Costa.
“Earnings for owners remain poor,” Banchero Costa said in a recent report. “One-year time charter rates have been on a positive trend since 2009, especially for smaller units, but are still well below the levels seen six or seven years ago.”
Current rates for a 12,000 dwt tanker are more than USD12,000/day: slightly better than the USD10,000/day rate in 2000. But the same tankers were getting more than USD17,000/day just before the financial crisis.
Shipowners who were optimistic about a recovery ordered chemical tankers in substantial numbers in 2013, at the same time that Chinese shipyards began diversifying into this segment. Previously, only Japanese shipyards built chemical tankers with stainless steel tanks.
Low oil and gas prices are expected to have a positive effect on the petrochemical industry, particularly in encouraging cheap exports of feedstock chemicals from the United States to Asia.
“There could also be positive spillover effects from the currently strong product tanker sector,” Banchero Costa reported. “Low oil prices also provide operational savings because of the reduced bunker prices. Additionally, vegetable oil trades have experienced strong growth in recent years and are expected to continue to do so.”
Banchero Costa noted that while chemical tanker newbuilding deliveries dropped significantly after 2008, these would pick up again in 2015, with a total of 109 units scheduled to be delivered. However, it is likely that a number of expected deliveries will slip into 2016.
Having grown by only 0.9% in dwt capacity in 2014, the chemical tanker fleet is expected to grow by 4% in 2015 and a further 3% in 2016.
IHS Maritime’s Sea-Web data shows the current orderbook amounts to around 209 units, totalling 4.5 million dwt. This is equivalent to 12.4% of the current trading fleet in terms of deadweight.
Tankers with stainless steel tanks account for 70% of the orderbook, as these are capable of carrying many cargo types.
“The construction of large chemical tankers of more than 20,000 dwt has become increasingly common over the last decade, but the core interest remains in small units of below 10,000 dwt,” Banchero Costa said.
This post was sourced from IHS Maritime 360: View the original article here.
