In the first quarter of 2017, the fleet that trades in chemicals and vegoils expanded by 26 vessels and in CPP by 10. Drewry noted the figure has reversed from the first quarter of 2016 when nine vessels were added for chemicals and vegoils and 19 for CPP trade.
Drewry pointed out that almost all the ships trading in the CPP market have the ability to switch to vegoils, and as a result these vessels are expected to carry chemicals and vegoils whenever they can earn higher profits.
“Future deliveries will mainly be for the chemical and vegoil carriers as the CPP fleet is currently oversupplied. Thus with current vessels on order, deliveries for both segments will increase by around 1.7% by end-2017,” said Hu Qing, Drewry’s lead analyst for chemical shipping.
“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,” she added.
However with too many operators at the moment competing in the same trade lanes, the situation does not favour market consolidation, according to Hu. Of the big operators, Odfjell has 10 stainless steel tankers on order averaging 45,000 dwt in addition to the 40 vessels of above 19,000 dwt in its current fleet.
Hu said all major players are looking to place themselves in geographically advantageous positions to reduce the turnaround time and thus limit the operating costs, which will only make it harder for the smaller players to compete.
Copyright © 2024. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited. Add Seatrade Maritime News to your Google News feed.
