Chemical Shipping News

Chemical shipping freight rates will weaken through 2018 due to the depressed outlook on overtonnaged long haul routes, according to the latest edition of the Chemical Forecaster, published by global shipping consultancy Drewry. The global chemical trade grew by a little over 4% in 2017, while overall tonne-mile demand expanded by almost 5%. Despite continuing global economic growth, Drewry expects seaborne chemical trade to grow by 2.5% in 2018 and tonne-mile demand by 1.6%, reflecting a slowdown in long-haul trip growth. Increasing self-sufficiency in base chemicals in Asian countries is a definite threat to long-haul trades. The global chemical capable fleet increased by 3.9% in tonnage terms in 2017.

Despite a shift in demand in the chemical shipping sector, Navig8 Chemical Tankers ended the fourth quarter ended 31st December, 2017 with a widened net loss of USD 3.7mln. Revenue for 4Q17 was $43.3 mill, compared to $33.9 mill for 4Q16. “The chemical tanker market began to show signs of improvement in the fourth quarter led by stronger demand in the chemical sector and tightening in the MR product tanker market,” said CEO Nicolas Busch. “With our fleet fully delivered, we are pleased to have generated sequential increases in revenues and operating income and believe we are well positioned as fleet growth for larger vessels begins to slow and chemical tanker demand continues to increase,” Nicolas added.

Subdued ordering and a narrowing in the tonnage supply-demand gap from late 2018 is expected to support a recovery in the chemical shipping market, according to the latest edition of the Chemical Forecaster, published by global shipping consultancy Drewry. Drewry estimates that tonne-mile demand of chemical commodities will grow at 3.8% on a year-on-year basis in 2017, of which the organic trade is likely to grow only at 1.5%. By contrast, inorganic and vegoil tonne-miles are expected to increase by 6.3% and 6.5%. Drewry estimates that the global chemical trade will grow at 3.3% in 2017, owing to the strong vegetable oil trade from Southeast Asia to South Asia.

The shipping fleet trading in chemical and vegoil markets is expected to accelerate at a much faster pace than demand, weakening earning prospects, according to the latest edition of the Chemical Forecaster, published by global shipping consultancy Drewry. Drewry estimates that tonne-mile demand will grow at 2.9% in 2017, and the fleet trading in chemicals/vegoils will expand by 9.5% by the end of this year, the highest fleet growth observed in recent years. The chemical shipping market is facing severe oversupply because of new deliveries and swing tankers returning to the chemical/vegoils trade and seeking employment in this market. The orderbook still contains 9% of the existing capacity to be delivered by 2021 and the deliveries of MR tankers will also contribute to rapid growth.

Demand for methanol and vegoil will moderately support global seaborne trade causing the shipping fleet trading in chemicals and vegoils to expand, according to the latest edition of the Chemical Forecaster, published by global shipping consultancy Drewry. A press release from Drewry said that the orderbook contains 144 stainless steel vessels totalling 3.4 mdwt for delivery by 2020, almost 22% of the existing capacity for such vessels; 63 of these vessels are in the size range of 25,000-40,000 dwt, while in the existing fully stainless steel fleet, there are 143 vessels in the size of 25,000-40,000 dwt category. These large vessels are meant to be employed in the pure chemical trade.

The American Waterways Operators (AWO) and The American Chemistry Council (ACC) have renewed for three years a Memorandum of Agreement to promote environmental, health, safety and security performance through ACC's Responsible Care and AWO's Responsible Carrier Program. This agreement was originally executed in 2006, and subsequently renewed in 2010 and 2013. The MOA extends cooperation and collaboration between chemical shippers and carriers and provides ACC's Responsible Care Partner companies in the marine sector the option of using AWO's Responsible Carrier Program audit system to meet ACC's Responsible Care certification requirements. Chemicals account for roughly 10 percent of total barge traffic, with 70 million tons moved by barge in 2014.

Chemical shipping vessel supply on major routes has been in surplus with many newbuilding deliveries and swing tankers flooding the market. As a result, freight rates on long-haul routes will continue to be challenged by surplus large vessels over the next two years, according to the latest edition of the Chemical Forecaster, published by global shipping consultancy Drewry. Time charter rates weakened in 2016, especially for larger tankers, and freight rates on major long-haul routes dropped. Although the trade volume from the US to Europe and Northeast Asia surged in 2016, the appearance of speculative vessels brought rates down. The fleet will continue to expand because of the large number of orders placed in previous years, but growth will be subdued compared to 2015-16.

Softening seaborne trade and rising fleet growth are expected to depress chemical shipping freight rates over the next few years, according to the latest edition of the Chemical Forecaster, published by global shipping consultancy Drewry. Spot rates collapsed in the third quarter as some charterers who usually fix their cargoes on contract took advantage of low spot rates. This situation also weighed on time charter rates and asset values, especially for the larger chemical tankers. In particular, freight rates on major long-haul routes came under severe pressure in the third quarter due to a fall in demand for China origin cargo, unexpected plant shutdowns in the Middle East and fierce competition between operators.

Time charter rates in the smaller chemical tanker vessel sizes are expected to remain stable over the next two years, but rates for the larger sizes, especially MRs, will decline due to the impact of falling clean petroleum products (CPP) freight rates, according to the latest edition of the Chemical Forecaster, published by global shipping consultancy Drewry. Weakened chemical tanker freight rates in the second quarter of 2016 have resulted in softer time charter rates. Drewry anticipates a modest improvement in the CPP market in the next two quarters, but expects chemical tanker freight rates to remain weak in the third quarter with a pick up in the fourth quarter of this year.

United Arab Shipping Co (UASC) is considering the sale of its stake in United Arab Chemical Carriers (UACC) for oil and petrochemicals  as part of its plans to merge with German container line Hapag-Lloyd, says Bloomberg. UASC hopes the sale will fetch over $600m, but deliberations are ongoing. Bank of America Corp has been tasked with finding buyers for the holding, says the report. The company held 95 percent of UACC according to the chemical shipping firm’s 2012 financial report, the most recent one available on the company’s website. No final decisions about the sale have been made, the people said. UACC, founded in 2007, is a mid-sized operator with a fleet of two dozen tankers.

Chemical shipping company Navig8 Chemical Tankers Inc. has taken delivery of its first stainless steel chemical tanker, the Navig8 Sirius, from Japanese shipbuilder Kitanihon Shipbuilding Co. Ltd. Navig8 Sirius is a 25,000 DWT stainless steel chemical tanker. The Navig8 Sirius is the first of six vessels contracted at Kitanihon to be delivered to the Company and is the first vessel to be delivered under the secured loan facility with Credit Suisse AG announced on June 22, 2016. The Navig8 Sirius will be entered into and operated in Navig8 Group's Stainless8 commercial pool. The company ordered the batch of six stainless steel chemical tankers in January 2014.

Chemical tanker shipping freight rates are expected to remain firm over the medium term, thanks to rising production capacity in key exporting countries, according to the latest edition of the Chemical Forecaster, published by global shipping consultancy Drewry. Since 2015, the US has started to export more and import less volume of liquid chemical products. US methanol capacity surged 77% in 2015 with the addition of around 3.5 million tonnes per year of new capacity. As a result, US methanol exports are starting to change the pattern of the long-haul chemical shipping trade. The volume of US exports to Northeast Asian and Europe rose 12% and 20% respectively last year. As a result, Drewry expects eastbound transatlantic freight rates in particular to rise over the medium term.

Dubai-based shipping company Gulf Navigation Holding PJSC (GulfNav) has announced in a press conference at Rose Rayhaan by Rotana April 19 its expansion plans to increase its assets under management and service-based revenue. The shipping company also revealed the appointment of Khamis Juma Buamim as the new Board Member, Managing Director and Group CEO by the Board of Directors during the event. Chairman Abdulla Saeed Abdulla Brook Al Hemeiri, and Khamis Juma Buamim along with other high-level executives…

Gulf Navigation Holding PJSC (GulfNav), the Dubai-based shipping company, has announced in a press conference at Rose Rayhaan by Rotana today (Tuesday, April 19, 2016), its key expansion plans to increase its assets under management and service-based revenue. The shipping company also revealed the appointment of Mr. Khamis Juma Buamim as the new Board Member, Managing Director and Group CEO by the Board of Directors during the event. The move forms part of the company’s intensified strategy to become one of the main industry leaders in the regional maritime and shipping industries. Chairman Abdulla Saeed Abdulla Brook Al Hemeiri, and Mr.

On the back of low bunker prices and more new buildings to be delivered in 2016, chemical shipping freight rates for both contracts of affreightment and spot cargoes will be under pressure throughout 2016, as there are some new operators looking to break into the long-haul trade routes, according to the latest edition of the Chemical Forecaster, published by global shipping consultancy Drewry. More and more larger vessels were delivered during 2015; a total of 193 ships, aggregating 7.4 million dwt with an average vessel size of 38,390 dwt hit the water during the year.

Maritime and logistics service provider Inchcape Shipping Services (ISS) has expanded its agreement with Chembulk Tankers into South America and Asia, the company announced today. The new agreement will see ISS handle some 150 additional port calls for Chembulk Tankers per year, in addition to its existing services on the east and west coasts of America. Chembulk is one of the largest deep-sea chemical shipping companies in the world. ISS’ work with Chembulk now encompasses Brazil in South America and Singapore, Hong Kong and Thailand in Asia. Further services will include managing dry dockings in the Bahamas and handling selected port calls in the U.A.E.

New US and Middle East methanol production capacity being added over the next two years will have serious implications for chemical shipping trade flow patterns, according to the latest edition of the Chemical Forecaster, published by global shipping consultancy Drewry. Methanol is one of the top five seaborne chemical commodities accounting for 35 percent of the world seaborne chemical and vegoil trade in 2014. Despite being the largest producer, by both capacity and output,…

Chemical shipping faces another tough year, but prospects are improving thanks to the strength of the product tanker market which is attracting a growing number of swing ships out of chemicals into products, according to the latest edition of the Chemical Forecaster, published by global shipping consultancy Drewry. Drewry estimates that seaborne trade in chemicals (including vegetable oils and fats) was stagnant in 2014 and is forecast to grow at less than 2.5% pa over the next few years.

Growing Paraxylene (PX) exports from North East Asia to China are contributing to the fast growth of intra-Asia coastal trade, but they are undermining long-haul seaborne trade, according to Drewry’'s recently published 'Chemical Forecaster' report. China’s consumption of PX has emerged as a key driver of global Chemical shipping demand. Its annual PX import requirements tripled from 2.9 million tonnes in 2007 to 9.0 million tonnes in 2013, representing 21% annual growth over this period. Meanwhile, the proportion of China’s total PX imports sourced from Northeast Asia, particularly South Korea, Japan and Taiwan, grew from 28% in 2009 to 73% in 2013, indicating that a large share of global seaborne PX is being traded within the coastal trade routes of Northeast Asia.

The chief executive of Bulknet.com will shortly close a $25-$30 million round of financing for his month-old Internet site, which he hopes will dominate online bookings for chemicals shipping. Mark Bitting said the financing, following an initial round that raised less than $1 million, should give the company a big head start on Internet competitors hoping to capture some of the multi-billion dollar chemical shipping market. "We're the only ones in this industry that have attacked e-commerce," he said, but added that he expects steep competition down the road given the number of other "dot-com" companies out there putting money into systems. The company has signed up 41 of the largest U.S.

Commenting on a lawsuit filed recently by Dow Chemical Co. against four chemical carriers including Stolt-Nielsen S.A., SNSA said that the company believes the Dow Chemical claims are without merit and that it will vigorously defend itself against those claims. The company added that the relationships between its chemical shipping unit - Stolt-Nielsen Transportation Group B.V. - and its customers are governed by contracts that contain arbitration clauses. SNSA said it will move for the courts to compel arbitration as agreed to by customers in their contracts with the company. The other three carriers named in the Dow Chemical suit are Odfjell ASA, Jo Tankers B.V. and Tokyo Marine Co, a unit of Mitsui O.S.K. Line Group.

Principal Maritime Management LLC of Southport, Connecticut, a shipping company owned by affiliates of Apollo Global Management LLC, has formed a new platform in the stainless steel chemical shipping sector. Additionally, Princimar Chemical Carriers has acquired its initial three stainless steel chemical tankers, all of which were purchased from existing owners and are currently in service. Princimar Chemical Carriers is focused primarily on acquiring stainless steel chemical tankers which operate in the global specialty and commodity chemical shipping trades. Princimar has fully committed financing in place for additional acquisitions, and plans an initial fleet of 12 to 15 vessels.

Principal Maritime Management LLC (PMM) of Southport, Connecticut, a shipping company owned by affiliates of Apollo Global Management LLC, informs of its new business in the stainless steel chemical shipping sector, through Princimar tankship acquisitions. PMM explain that Princimar Chemical Carriers (Princimar) acquired its initial three stainless steel chemical tankers, from existing owners. Princimar is focused primarily on acquiring stainless steel chemical tankers which operate in the global specialty and commodity chemical shipping trades. It has fully committed financing in place for additional acquisitions, and plans an initial fleet of 12 to 15 vessels.