Odfjell has forecast chemical tanker supply growth of 2% and chemical tanker demand of 5% on average per year through 2021.
The company has noted early signs of a positive effect from new and large export-oriented expansions from the US and Middle East coming on stream.
Despite what is normally a seasonally weaker first quarter, the chemical tanker market continued to improve on the back of strong exports from the US and Middle East. There was also less supply pressure from swing tonnage during the quarter.
This effect will accelerate further into the second half of 2019 and into 2020, as more than 20m tonnes of low cost organic liquid chemical capacity is coming on stream between 2019 and 2020, of which the majority is expected to be seaborne traded.
“The chemical tanker markets improved in the first quarter and we expect the trend to continue as a result of the strong fundamentals in our markets, and a firming tanker market in general,” said Kristian Mørch, ceo of Odfjell.
A deficit in China’s domestic vegetable oil production is also encouraging more seaborne imports. According to the US Department of Agriculture, this will lead to palm oil and soybean imports increasing by 19% into China this year.
Together with continued rebound of strong demand from India, Odfjell is expecting the vegoil market to remain strong and absorb a large share of chemical tanker supply.
The shrinking deliveries of newbuild chemical tankers are helping to firm the market, with Odfjell forecasting eight core chemical tankers to be delivered in the second half of 2019, of which three to Odfjell, compared to 18 vessels delivered in the year-ago period.