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Chemical Tankers Market Overview
The Chemical Tankers Market size is forecast to
reach US$35.6 billion by 2027, after growing at
a CAGR of 4.1% during the forecast period 2022-2027. Chemical tankers are cargo
ships used for the transportation of liquid chemicals in bulk. Chemical tankers
range from 5,000 to 59,000 deadweight tonnage (DWT) in size and have cargo tanks that
are either coated with epoxy or zinc paint or made from stainless-steel.
Chemical cargoes carry chemicals such as caustic
soda, sulfuric acid, methanol, many other organic inorganic chemicals, all
of which may be hazardous. Based on the hazards, chemical tankers
are designed, constructed and operated to mitigate the risks. In order to transport
goods, chemical tankers are also classified based on the International Maritime
Organization (IMO) hazard classification of either type I, II or III. The
increasing global economic activity acts as a driver for the Chemical Tankers Market.
Chemical Tankers Market COVID-19 Impact
The COVID-19 pandemic has disrupted every sphere of
life, led to restrictions on the movement of goods at the domestic as well as
international levels. Ports were closed due to quarantine which crippled the
shipping industry. Vessels from certain countries were not allowed to dock due
to fear of contamination. The challenges of crew rotations to mitigate the
spread of the virus quickly grew into a crisis for the global shipping
industry. The pandemic disrupted maritime shipping services, leading to
canceled sailings, port delays container shortages. These disruptions were
particularly profound for imports originating from North-East Asia. Combined
with COVID-related changes, the disruptions increased volatility in maritime
freight rates across regions caused significant delays in the delivery of
crucial imports. According to the International Trade Commission, in the first
half of 2020, US maritime container imports declined 7% by volume, compared to
the same period in 2019. Container shipping firms canceled more than 1,000
voyages in the first six months of 2020. The pandemic wreaked havoc across the
shipping industry resulted in cargo delays, shipping container shortages high
freight prices; which impacted the Chemical Tankers Market as well.
Report Coverage
The “Chemical Tankers Market Report – Forecast
(2022-2027)” by IndustryARC, covers an in-depth analysis of the
following segments of the chemical tankers industry.
Key Takeaways
- Asia-Pacific dominates the Chemical Tankers Market on account of the established chemical industry in the region. According to Invest India, the chemicals & petrochemicals sector is expected to grow to US$300 billion by 2025.
- Chemical tankers are vessels that are used to carry liquids in bulk, from methanol to vegetable oils.
- Based on the chemicals transported, different types of coatings are used for the tanker. For instance, edible crude vegetable oils require epoxy coating. Acids and other harsh chemicals are transported in stainless-steel tankers. Some tankers also have zinc coating.
Figure: Asia-Pacific Chemical Tankers Market Revenue, 2021-2027 (US$ Billion)
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Chemical Tankers Market Segment Analysis – By Cargo
The IMO II segment held the
largest share in the Chemical Tankers Market in
2021. Chemical tankers may carry dangerous, flammable, toxic chemicals. In
order to transport goods, chemical tankers need to have the proper International Maritime Organization (IMO) hazard
classification of either type I, II or III. A type I chemical tanker is
intended to transport most hazardous chemicals, requiring maximum preventive
measures to prevent any leakage of cargo. Type II chemical tanker is intended
to transport chemicals requiring significant preventive measures whereas type
III chemical tanker is intended to transport chemicals requiring a moderate
degree of containment to increase survival capability in a damaged condition.
Most chemical tankers are IMO II III since the volume of IMO I cargoes is
limited. The growth of the IMO II cargo segment of the chemical tankers is
because of the use of IMO II chemical tankers for shipping chemicals such as methanol,
ethanol, vegetable oils, fats, along with alkanes. Therefore, this segment is
anticipated to dominate the Chemical Tankers Market.
Chemical Tankers Market Segment Analysis – By Material
The stainless-steel segment held
the largest share in the Chemical Tankers Market is expected to grow at a CAGR
of 3.9% during the forecast period. Chemical tankers are generally equipped
with a series of separate cargo tanks that are either coated with specialized
coatings such as epoxy or zinc paint or made from stainless-steel.
The coating or cargo tank material determines what types of cargo a particular
tank can carry. For instance, stainless-steel tanks are required for aggressive
chemicals such as sulfuric acid, phosphoric acid, other aggressive organic
inorganic chemicals. Stainless-steel is widely used as a tank material owing to
its better chemical resistance and greater ease in tank cleaning inspection.
Thus, cargo contamination hazards can be reduced in stainless-steel tankers.
This is the reason why a majority of the chemical tankers have stainless-steel
tanks. For instance, the IINO Lines website states that 74.4% of the group’s
chemical tanker fleet is equipped with stainless-steel tanks. Therefore, the stainless-steel
segment is set to dominate the market during the forecast period.
Chemical Tankers Market Segment Analysis – By Geography
The Asia-Pacific region held the largest share in
the Chemical Tankers Market in 2021 up to 46% due to the region's
well-established agriculture chemical sectors. Palm oil forms the largest cargo
group within the vegetable oil sector. India is the world’s second-largest
consumer number one importer of vegetable oil. As per the Economic Survey
2021-22, India imports around 60% of its consumption of edible oils, palm oil
constitutes around 60% of the imports of edible oils. According to the Solvent
Extractors Association of India (SEA), India imported around 1 million tonnes
of edible oil in March 2022 when compared to around 0.9 million tonnes of
edible oil in March 2021. Indonesia and
Malaysia account for 85% of the global production of edible oils. According to government sources, Malaysia is planning to boost its share of the edible oil market after geopolitical tensions due to the Russia-Ukraine war disrupted sunflower oil shipments further tightened global supplies. Japan, Korea, China are major shipbuilding yards. Currently, a majority of the world’s stainless-steel chemical tankers are from these three countries. Therefore, this region is expected to continue to dominate the Chemical Tankers Market.
Chemical Tankers Market Drivers
Increasing Global Economic Activity Post-Pandemic
The pandemic caused severe damage for the global
shipping industry. However, once the lockdown was lifted, the revival of the
economy began. The global economy is dependent on chemicals, as every industry,
directly or indirectly, requires chemicals. For example, chemical tankers carry caustic soda which is
required in the processing of bauxite to make aluminum. Transportation of
chemicals by sea is a cost-efficient, fast, effective method of cargo delivery
over long distances. According to the World Bank, the global economy is poised
to stage its most robust post-recession recovery in 80 years, in 2021, ever
since the onset of the pandemic. The emergence of vaccines has also given a
positive outlook for the global economy. For instance, the US economy has been
bolstered by massive fiscal support, vaccination is expected to become
widespread by mid-2021, growth is expected to reach 6.8% in 2021. As the
vaccination rates increased, several countries began easing restrictions which
opened up more shipping routes. Chemical tankers carry hazardous chemicals that
are crucial in the synthesis of pharmaceuticals which are in high demand due to
the pandemic. The demand for chemicals in the next couple of years will be
driven by an expected strong recovery following the pandemic across the globe.
Therefore, the increasing global economic activity drives the Chemical Tankers Market.
Change in Trade Flows
After the pandemic slump, global trade rebounded in
2021 is expected to recover further in 2022. According to the United Nations
Conference on Trade Development (UNCTAD), in Q1 2021, the value of global trade
in goods services grew by about 4% quarter-over-quarter by about 10%
year-over-year. Global trade in Q1 2021 was higher than pre-crisis levels, with
an increase of about 3% relative to Q1 2019. Europe relied on Russian exports
for methanol, caustic soda, benzene, styrene. Due to the invasion of
Ukraine, several countries including European countries, imposed sanctions on
Russia stopped Russian exports. As Russian exports are mainly short-haul,
replacement volumes will add additional miles therefore drive tonnage demand
higher. However, other countries in Asia have not halted Russian exports
leading to incremental demand in tonnage an increase in miles. Thus, change in
trade flows is a driver for the Chemical Tankers Market.
Chemical Tankers Market Challenges
Volatility of Crude Oil Prices
Maritime vessels use bunker fuel to power their motors. Despite the International Maritime Organization (IMO) announcing a 0.50% global sulfur cap on marine fuel emissions from January 2020, the fuel maritime vessels run on is obtained from crude oil. Therefore, crude oil prices directly affect the chemical tankers industry. The US-China trade war in 2019 resulted in a large crude oil price drop. In August 2019, U.S. West Texas Intermediate (WTI) crude fell US$1.18, or 2.1%, to US$54.17 a barrel. On 20 April 2020, the price of WTI crude oil slumped into negative for the first time in history, falling to negative US$37.63 per barrel. The Texas Freeze in February 2021 also impacted crude oil prices. WTI crude fell 62 cents, or 1%, to settle at US$60.52 a barrel. On February 24, when US President, Biden, announced sanctions against Russia, WTI crude rose 71 cents, or 0.8%, to settle at US$92.81 a barrel, after earlier rising to US$100.54. As Russia is the world's second-largest producer of crude oil after Saudi Arabia, supplies about a third of Europe's needs, the geopolitical tensions directly affect crude oil prices. On 6 March 2022, the US Secretary of State said that the US administration its allies were discussing a ban on Russian oil supplies. This led to a jump in oil prices to US$139 a barrel. Due to the ongoing geopolitical tensions, crude oil prices skyrocketed in international markets as WTI reached US$120 a barrel. As of June 2022, WTI crude settled at $120.26 per barrel. Thus, the volatility of crude oil prices poses a challenge for the Chemical Tankers Market.
Chemical Tankers Industry Outlook
Product launches, acquisitions and R&D activities are key strategies adopted by players in the Chemical Tankers Market. The Chemical Tankers top 10 companies include:
- Stolt-Nielsen
- Odfjell
- Navig8 Chemicals
- Wilmar International
- Mitsui O.S.K. Lines
- IINO KAIUN KAISHA, LTD.
- Tokyo Marine Asia Pte Ltd
- Nordic Tankers
- Seatrans Chemical Tankers
- Bahri Chemicals
Recent Developments
- In November 2021, Odfjell announced that it disposed of its last short-sea vessels in the Asia-Pacific market to focus on its core deep-sea chemical tanker business.
- In November 2021, BW Group’s Hafnia Ltd. announced that it is acquiring a fleet of 32 IMO II tankers from Oaktree Capital Management’s Chemical Tankers Inc.
- In July 2021, IMC’s Aurora Tankers formed a partnership with Golden Stena Baycrest Tankers to manage operate stainless-steel chemical tankers. The partnership aims to focus on expansion across Asia for the two companies.
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