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The shipping fleet trading in chemicals and vegoils is heading for an expansion moderately driven by a demand for methanol and vegoil, shipping consultancy Drewry informed.

The orderbook contains 144 stainless steel vessels totalling 3.4 million dwt for delivery by 2020, almost 22% of the existing capacity for such vessels. Out of the number, 63 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, according to Drewry.

The chemical tanker fleet grew by 1.3% in the first quarter of 2017 with the addition of 36 vessels. The fleet that trades in chemicals and vegoils expanded by 26 vessels and in clean petroleum products (CPP) by 10.

“This is a definite role reversal from the first quarter of 2016 when 9 vessels were added for chemicals and vegoils and 19 for CPP trade, indicating the current mood of the market,” Drewry said.

The chemical fleet also saw a higher number of vessels trading in chemicals and vegoils for the first time since 2012. Almost all the ships trading in the CPP market have the ability to switch to vegoils; as a result these vessels are expected to carry chemicals and vegoils whenever they can earn higher profits.

“Nonetheless, there are still far too many operators at the moment – sometimes competing in the same trade lanes, which does not help the market to consolidate any time soon,” according to Drewry.

Future deliveries will mainly be for the chemical and vegoil carriers as the clean petroleum products (CPP) fleet is currently oversupplied. Thus with current vessels on order, deliveries for both segments will increase by around 1.7% by end-2017.

“By 2018 the chemical and vegoil carrying fleet will outpace its CPP counterpart in terms of growth. In this current scenario major players can only revive the market through consolidation, while the smaller players will find it hard to survive,” Hu Qing, Drewry’s lead analyst for chemical shipping, said.