Due to a rising production capacity in key exporting countries, chemical tanker shipping freight rates are expected to remain firm over the medium term, according to 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, in 2015, the shipping consultancy said, adding that the eastbound transatlantic freight rates in particular are expected to rise over the medium term.
Since sanctions on Iran have been lifted, many new projects in the Middle East are expected to come on stream from this year.
Exports from the region to Northwest Asia and Europe rose 5% and 23%, respectively, in 2015 and Drewry expects the pace of growth to continue over the next three years, boosting freight rates.
However, on the westbound transpacific route many large vessels have joined the trade as the second half of 2015 saw 38 more vessels on this route, 15 of which were of 30,000-40,000 dwt.
“We expect more large vessels to join the eastbound transpacific trade during 2016 and as a result we expect freight rates to weaken in the short term but to remain stable over the medium term,” said Hu Qing, Drewry’s Lead Analyst for Chemical Shipping.