Posted - November 22, 2013
A nearly 25 percent boost in American natural gas output during the past
decade has cut costs for chemical producers, increased the export of
materials that use these chemicals, such as paint and plastics; and
improved the fortunes of the railroad, trucking, marine shipping, and
airline industries that transport the chemicals.
The chemical and product tanker market, which had been in a slump recent
years, is rebounding as a result. Heightened chemical production is
beginning to outpace capacity for the global fleet of tankers, which is
driving up demand for the specialized ships as well as freight rates.
This shortage is expected to peak in 2015.
Analysts estimate that rising U.S. exports of chemicals such as
ethylene, which is a basic component of plastics and textiles, will
drive a 5 to 6 percent annual uptick in global demand for chemical
tankers through 2015. During the same time, chemical tanker tonnage is
expected to grow by less than 0.5 percent. The industry is somewhat
insulated by a surplus of tankers built during the last decade.
Still, fleet use is expected to reach 90 percent of available capacity
by next year, and continued growth in output of chemicals could squeeze
tanker availability further. Dr. Jürgen Sorgenfrei, director of
consulting services for IHS Supply Chain Solutions, told IMT that the
shipping market has not yet reacted to this trend.
While this increased demand represents great opportunity for marine
shipping companies, shortages won’t be easy to resolve. Chemical tankers
are more complex than their oil-carrying or bulk-shipping sisters. They
require up to 50 reinforced compartments to segregate smaller volumes
of potentially hazardous materials. Few shipyards have the expertise to
build these vessels, nor can other types of tankers be retrofitted to
carry chemicals.
“Chemical tankers and to some extent product tankers are built with
design specifications that are required for the carriage of many
chemicals,” Brian Cleary, head of research and business development for
SPI Marine (USA), told IMT. “Most ships trading today that are oil
tankers cannot be converted into chemical carriers. The growing demand
for chemical transportation will have to rely on new ships being
ordered.”
A chemical tanker ordered today would be unlikely to be delivered before
2015, Cleary said. Shipping companies with a strong need would be smart
to order multiples, he suggested.
“You can improve upon the two-year period when you place an order for a
multiple number of identical ships,” he said. “The first one will take
two years, but subsequent sister ships can be produced in less time when
all are built at the same shipyard.”
Shipping companies such as SPI Marine, which acts as an intermediary
between shippers and carriers, and Norway’s Odfjell, the largest
chemical and liquid transportation company in the world, are reporting
more business and higher earnings. Companies paying to move chemicals
will feel the squeeze. Shortages may attract newly developed companies
that would likely have a relatively easy time gaining financing through
traditional banking institutions or private equity funds, Cleary said.
New designs in chemical tankers will enable shipping companies to
improve their efficiency. New tankers, such as those to be manufactured
by South Korea’s Hyundai Mipo Dockyard for d’Amico International
Shipping S.A., feature a combination of modern hull design and efficient
engines that can reduce fuel consumption by six to seven tons per day.
They also reduce emissions, which will become critical when new EU and
International Maritime Organization (IMO) regulations take effect.
Sorgenfrei confirmed that future opportunities for chemical tankers lie in better efficiency.
“The biggest challenge is to react on the dramatically changed structure
of operating expenses,” he said. “In the past, capital costs have been a
major part of the costs; today, in times of very low interest rates and
enough investment capital available, this is no longer the case. Today,
the cost for bunker fuel is of huge importance, and new buildings need
to be more energy-efficient and need to comply with the increased
environmental standards around the world fixed by the IMO.”
The chemical tanker of the future, therefore, is fuel-efficient, low in
emissions, and (preferably) delivered as quickly as possible.
Source: Thomasnet
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