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
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%
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 recent reduction in US exports, as a
result of Hurricane Harvey, which had a negative impact on the
chemical shipping trade, is expected to prove only temporary.
Trade will return to normal patterns when North American plants
Chinese demand for methanol has been improving during the second
half of the year as MTO plants either plan to ramp up or resume
production. Ten new MTO plants are coming on stream in the second
half of 2017, and two new plants will begin operations early in
One methanol plant in Iran and two plants in the US will come
online by the end of 2017. Drewry thus expects moderate growth in
the global methanol seaborne trade, especially in long-haul and
domestic trade routes in China.
Time charter rates picked up in the third quarter of 2017,
supported by strong demand for CPP and palm oil. Robust demand,
high fuel production and declining fuel inventories will
strengthen the clean product tankers market from the fourth
quarter to 2018.
"The chemical tanker fleet is oversupplied, and increased demand
in the CPP market will attract more swing tankers to move to the
CPP trade. Overall, we expect earnings to improve over the medium
term," said Hu Qing, Drewry's lead analyst for chemical shipping.