Drewry’s Chemical Tanker Freight Rate Index dropped during the first quarter, registering its first quarterly decline since 3Q10. Transpacific westbound rates lost as much as 13%. The next quarter is traditionally a lean period, with Drewry forecasting rates to bottom out before climbing in the latter stages of the year, but this might not be good news for everyone. Overcapacity remains the bane of the market, so owners are hoping for a surge in freight rates coupled with a fall in bunker prices, which have eroded their earnings. Otherwise, they will struggle to maintain service levels and avoid serious cash-flow problems and insolvencies. Owners are responding by reducing their fleets to cut costs. There are still several companies struggling with bankruptcy or under court protection from their creditors. BLT-Chembulk is restructuring its debt by declaring a moratorium on repayments until a new schedule can be worked out, thus enabling then to maintain operating cash flows. However, some ships have been withdrawn from the pool as owners were not willing to agree to the restructuring.
It will be a quiet year in the shipyards. The orderbook now stands at 5.7% of the number of ships and 6.9% of the dwt tonnage, making it the smallest since 2003. Deliveries in a single quarter have not been so low since 2005.
Since the end of 2011, the average capacity of the fleet grew by 0.7% to 20,660 dwt as larger vessels are delivered and smaller ones scrapped. The ships in chemical and vegetable oil trades were 1.1% larger at 14,570, dwt whereas CPP ships decreased in average size by 2.3% to 30,902 dwt as smaller ships were released from arrest or layup. Rohit Pattnaik of Drewry Maritime Research stated, “While the decline in newbuilding activity is commendable, there is a noticeable lack of investment in the specialised chemical tanker category, which could hurt the sector in the long run.”
This hardly seems the time for owners to think of new tonnage, but investment in the specialised tanker category might just give owners a chance to secure future demand. “Chemical Forecaster 1Q12” is published by Drewry Maritime Research. Released in April 2012 and is priced at £2770 for a yearly subscription, based on 4 quarterly issues.
The report will be available in pdf format which can be downloaded from the Drewry website www.drewry.co.uk.