Chemical Tankers Market Leveraging Flourishing Chemical Industry besides Global Transition towards Vegetable Oils and Fats
Posted on Sep 18 2019 11:49 AM
"The Global Chemical Tankers Market size was evaluated at $27 billion, and it is poised to escalate at a standard CAGR of 4.9 % during the forecast period 2019-2025."
Chemical Tankers Market Poised for Consistent Returns
Rapid population expansion across the world along with the growing purchasing power of urban population across emerging economies have proliferated the demand for consumer products globally. According to WHO, 60% of the world population will live in urban areas. On the other hand, the growing purchasing power can be fathomed by the World Bank statistics, according to which, the annual growth in final consumption expenditure, in 2017, was 2.8%. The elevated demand for consumer products has further instigated the end-user industries to enhance their production capacities. The improvement in end-user industries is setting the stage for gains in chemical production. This is attributed to the fact that almost all industrial sectors at some point of time use chemicals either as input material or as a catalyst.
Moreover, any interruption in the supply of chemicals will stimulate a drastic impact on plant output. Chemicals are used in a wide range of industries producing various commodities such as pharmaceuticals, fertilizers, textiles, plastics, polymers, agrochemicals, paints, and dyes, among others. Thus the increasing use of chemicals across various end-user industries such as construction, agricultural, medical, food and beverages, semiconductor, and the automobile is in turn leading to large-scale production by chemical industries.
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The growing development in the chemical industry can be perceived from the statistics by International Trade Centre (ITC), according to which the trade value of organic and inorganic chemicals, in 2018, was evaluated at $618 million. The trade had witnessed substantial growth at an average annual growth rate of 15%. It is quietly evident that large-scale chemical production requires a feasible and affordable bulk transportation method such as chemical tankers for shipping chemicals to different parts of the world. Thus the burgeoning usage of these chemical products across the world has resulted in the development of advanced ships such as chemical tankers that can carry multifarious chemicals in bulk. The propitious demand in the chemical industry is creating a demand influx in the chemical tankers market.
Additionally, technological innovations in chemical tankers are also contributing to the market growth. For instance, the development of ORCA technology allowed chemical tankers to be fitted with cylindrical, individual, lightweight, and insulated cargo tanks. It is now feasible to design a chemical tanker with independent cargo tanks within the same expenditure while having the same capacities as a conventional tanker. PowerChina SPEM and Pacific Green Technologies jointly developed ENVI-Marine system that can operate in either open or closed modes to remove sulphur from less expensive high sulphur fuel. These factors are providing momentum to the chemical tankers market.
As of 2018, the global Chemical Tankers Market size was evaluated at $27 billion, and it is poised to escalate at a standard CAGR of 4.9 % during the forecast period 2019-2025.
Chemical Tankers Market Leveraging Hazardous Chemical Shipment Regulations—
Increasing regulations regarding the safe shipment of hazardous chemicals are further contributing to the chemical tankers market growth. For instance, the United States Department of Transportation (DOT) Regulations for the Shipment of Hazardous Materials is introduced to eradicate the harmful effects caused due to improper storage and shipment of hazardous chemicals. Recently, CEOs of more than 300 Chinese chemical companies belonging to the China Petrochemicals and Chemicals Industry Federation (CPCIF) formally accepted the Responsible Care Global Charter. This is intended to strengthen chemicals management systems to safeguard people and the environment. These type of regulations by the government is instigating the chemical manufacturer to prefer stringent and safe transportation methods such as chemical tankers as these are designed in compliance with the regulations listed in the International Bulk Chemical Code (IBC Code) facilitating no further inspections before every transportation. Thus, these factors are creating growth avenues for the chemical tankers market.
Chemical Tankers Market Gaining Impetus from Key Application Segment—
Based on fleet material, the chemical tankers market is bifurcated into stainless steel and coated. Among these stainless steel, tankers are considered to generate maximum revenues to the market in the coming years. This is mainly due to the capability of stainless steel tankers to transport aggressive acids, such as hydrochloric, sulfuric, and phosphoric acid. Moreover, stainless steel offers high corrosion and chemical resistance and ease of tank cleaning and inspection. Thus the key application segment is poised to propel at a CAGR of 4.1% through to 2025.
Increasing Demand for Vegetable Oils and Fats Creating Positive Impact on Chemical Tankers Market—
In recent times, vegetable fats and oils became the most important ingredients in the food industry. There is an increasing demand for vegetable fats and oils as they contain unsaturated fatty acids. Rising awareness about health benefits associated with the consumption of vegetable oils and fats among consumers boosted the production of vegetable fats and oils across the world. Hence, the increasing production of vegetable fats and oils is anticipated to propel the chemical tankers market growth. In addition to this, increasing global population leads to increased use of vegetable fats and oils, which is also positively impacting the market growth.
Asia-Pacific Taking the Lead in Having Maximum Stake in Chemical Tankers Market—
Geographically, Asia-Pacific is considered to be the most alluring marketplace having a substantial share of 33% in the global demand share as of 2018. This is mainly attributed to the increased demand for a variety of chemicals from emerging economies such as India, China, and Japan. Moreover, increasing demand for petroleum products in these countries is positively influencing the market growth in this region. Indian chemical market, being the third-largest producer of chemicals by volume in Asia, stood at $163 billion in 2017-18 and is expected to attain $304 billion by 2025, according to the Invest India, a national investment promotion and facilitation agency.
Additionally, the shale gas revolution in China is creating an unprecedented endorsement for chemical tankers. According to OSEA, oil and gas industry event in Asia, shale gas production in China in 2017, was 9 billion cubic metres and it is expected to reach 80 to 100 billion cubic meters by 2030. These factors have rendered Asia-Pacific with the maximum market share.
Chemical Tankers Market Companies’ Strategies—
Major companies in the chemical tankers market include Stolt-Nielsen, Odfjell, Bahri, Nordic Tankers, Wilmar International, Navig8, MOL Chemical Tankers, Team Tankers, Iino Kaiun Kaisha, and MISC Berhad. These companies are adopting intellectual strategies such as collaborations, agreements, acquisitions, mergers, and partnerships to increase their shares in the chemical tankers market and cater to the increasing demand for tankers used for shipping chemicals and chemical products.
For instance, Odfjell (Norway) announced its agreement with Sinochem Shipping (Singapore) in November 2017. As per this agreement, Sinochem Shipping will be offering four new orders to Odfjell to manufacture 840,900 DWT chemical tankers. This agreement intended to serve the growing demand for chemical tankers across the globe.
Stolt-Nielsen Limited acquired chemical tanker operations of Jo Tankers in 2016. This acquisition represents an enterprise value of $575 million that comprises of eight chemical tanker new buildings, 13 chemical tankers, and 50% share in a joint venture.
In 2019, MOL Chemical Tankers acquired entire shares of Nordic Tankers. This acquisition creates a stronger business platform for MOL and makes it as one of the major operators of stainless-steel chemical tankers in the world.
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