Industry news

  1. HOME / NEWS / Industry news
2024-06-11

Chemical tanker prices rise as much as 75% since 2020 on lack of liquidity – expert

Chemicals tanker prices have risen globally 30-75% in the past four years on a lack of liquidity, an expert at Chile-headquartered chemicals bulk operator Ultratank said on Tuesday.


Mathias Dummer, market analyst at Ultratank, added since pandemic-hit 2020 prices have steadily grown, especially those for second-hand tankers, which have gone up as much as 75% to around $35 million per chemical tanker.

Before the pandemic, those prices stood at around $26 million.


In newbuild chemical tankers, prices have gone up since 2020 by 30% to around $40 million, said Dummer. Before the pandemic, newbuild prices stood at around $32 million.

Dummer was speaking at an event about logistics organized by the Latin American Petrochemical and Chemical Association (APLA).


HIGHER LOGISTICS COSTS FOR LONGER?

The analyst said the higher costs for chemical tankers could be here to stay, because chemicals market fundamentals would support in years to come strong freight markets and as long as key conflicts globally remain unresolved.


“The embargo on Russian crude and the situation in the Red Sea is supporting higher tonne miles and keeping swing tonnage away. If solutions to both conflicts are reached, freight markets will likely adjust downwards, but this will be highly dependent on how easily supply chains can adjust back,” said Dummer.

“Ship operators are facing higher costs, which will likely support higher rates, even if trading gets back to normal.”


Moreover, the analyst added that the chemical tankers fleet is ageing, which makes it a heavily pollutant sector, while international regulations from the International Maritime Organization (IMO), an UN-dependent body, are pushing the industry towards decarbonization.


“The road to shipping decarbonization will pose additional challenges and may further hinder the fleets’ productivity by forcing slower sailing speeds and retiring ships from the market,” said Dummer.
“The use of renewable fuels will likely increase operational costs.”




← previous
next →

Related content