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Petrochem tanker trade set to rise

Feb. 2, 1998

Worldwide seaborne trade in organic chemicals is set to rise to almost 55 million metric tons in 2000 from just more than 46 million tons in 1996. This is the prediction of Ocean Shipping Consultants Ltd. (OCS), Chertsey, U.K., which says trade growth during 2000-05 is expected to be even stronger, taking total trade to almost 70 million tons in 2005. The analyst said the rapid rise in petrochemical plant capacity in South and East Asia is expected to remain the key factor influencing chemical

Worldwide seaborne trade in organic chemicals is set to rise to almost 55 million metric tons in 2000 from just more than 46 million tons in 1996.

This is the prediction of Ocean Shipping Consultants Ltd. (OCS), Chertsey, U.K., which says trade growth during 2000-05 is expected to be even stronger, taking total trade to almost 70 million tons in 2005.

The analyst said the rapid rise in petrochemical plant capacity in South and East Asia is expected to remain the key factor influencing chemical carrier demand through 2005.

Trade growth

"In the case of organic trade," said OCS, "annual growth rates averaged 7%/year during the early 1990s, with particularly strong growth witnessed over 1995-96 of around 9%/year.

"With the expansion of Southeast Asian petrochemical projects, overall organic trade growth is set to fall back from recent levels, gradually declining to less than 3%/year by 2001-02."

Petrochemical capacity expansion in South and East Asia is expected to reduce interregional organic chemical trade volumes in the medium term, while boosting intraregional trade movements, particularly in 2001-02.

"Toward 2005," said OCS, "organic chemical trade levels are expected to enter a renewed growth phase, expanding by 7-8%/year.

Asian recovery role

"The expansion of low-cost feedstock, export-based facilities is set to bolster shipping demand, particularly from the Middle East, underpinned by a recovery in South and East Asian economic growth rates, especially among the industrializing nations."

OCS said lower crude oil prices and weaker currencies within South and East Asia are set to underpin growth in exports of organic chemicals. This will lead to increased Asia-to-Europe and Asia-to-U.S. product movements.

The petrochemical industry is also expected to focus increasingly on feedstock costs, with trade flows reflecting a growing preference for supply sources in the Middle East, U.S., and Latin America, particularly for ethylene glycol, ethylene dichloride, and vinyl chloride monomer.