- Seaborne Chemicals Trade Sees Minimal Growth at 0.3%.
- Organic Chemical Demand Weakens, Exports from Key Producers Drop.
- China Turns Styrene Exporter, Indonesia Cuts Palm Oil Shipments.
Chemical tanker charter rates have dropped nearly 20% compared to last year, largely due to a wave of new vessel deliveries and a sluggish global export market. This decline comes on the heels of significant contracting activity over the past three years, which has now led to fleet expansion and an oversupply situation in the market, reports Seatrade Maritime.
Marginal Growth in Seaborne Chemicals Trade
The global seaborne chemicals trade is expected to see only a modest growth of about 0.3% in 2025. This slight increase is primarily driven by higher volumes of inorganic chemicals and vegetable oils. On the flip side, demand for certain organic chemical segments has weakened, and cuts in exports from major producers have further dampened trade activity.
Fleet Expansion Pressures Charter Market
Analysts at Drewry report that over 300 chemical tankers are set to be delivered in both 2025 and 2026, with projections indicating a drop to around 200 vessels by 2027. This surge in new ships is a result of heavy ordering in recent years and continues to put downward pressure on charter rates.
China and Indonesia Drive Export Slowdown
Export cuts from key players, especially China and Indonesia, have had a significant effect on trade volumes. China’s styrene production has skyrocketed, shifting the country from being a major importer to a modest exporter by 2026. However, the expected export volumes will still be relatively low. In Indonesia, palm oil exports have plummeted. The government’s initiative to boost the use of B50 biofuel, a mix of 50% palm oil-based fuel and diesel, has led to increased domestic consumption and less availability for export.
Red Sea Conflict Disrupts Trade Routes
Geopolitical tensions in the Red Sea, particularly the renewed hostilities led by the Houthis, have complicated the traditional shipping route from Asia to Europe via the Suez Canal. Consequently, chemical tankers engaged in East-West trades are now being rerouted around the Cape of Good Hope, which adds distance and costs, while also reducing the availability of vessels in the market.
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Source: Seatrade Maritime
