The chemical shipping industry will continue to sail through the difficult period because of falling substantial bunker prices and falling operating costs as well as late delivery of many vessels. Despite these, economic downturn must be watched closely and how it will affect the shipping industry and chemical tanker operators in particular will be interesting to monitor.
Certain issues such crew shortages are a genuine reality which could create stagnate growth for certain players in the chemical tanker industry however while this can be a big issue for some companies, for those companies that have an edge over other companies in sourcing their crews will be getting a strong competitive advantage in few years ahead. This is particularly so because based on Drewry Reports, the shortage of crews would mount to more than 34,500 crews over the next 1 - 2 years against the total requirement of 498,000 and this shortage will increase to 83,900 in 2012. Certainly those shipping companies that have sophisticated and dedicated crew recruitment and retention programs will find its position stronger than ever.
On the outset, the increase of piracy as what continues to happen in the Gulf of Aden meant that the chemical tanker operators such as Odfjell, amongst others, would continue to divert their fleet around the Cape of Good Hope, as opposed to using the Gulf of Aden, Red Sea and Suez Canal and this create increase costs of shipping as well as insurance. However such effects will not be substantial as compared to the fact that the vessels will have to travel farther and therefore impacting on the expansion of tonne miles across the chemical tanker operators in the world. Expansion of ton-miles in turn will affect positively on the tanker rates.
In addition, several of the tankers in recent attempt for hijacking have been foiled as the new EU, NATO as well Chinese naval patrol force seems would have done a better jobs at combating pirates for the sake of the industry.
On issues with regard to poor market conditions, some of the companies within the chemical tanker industry which rely heavily on certain customers for transporting chemical products which have been badly affected with current global slowdown such as in automotive industry will suffer more than others. While those companies which have diversified type of customers and do not have concentration of customers or those companies which continue to transport various type of cargoes will be able to fair well in current crisis.
The most hardly hit chemical tankers operators in this crisis would be those with smaller fleet, a new comer to the market or those which have tankers that are not flexible enough to carry various chemical products i.e. epoxy coated tankers or zinc coated tankers instead of stainless steel.
Now with the production plants coming back on line in October after the damage caused by Hurricane Ike, US Gulf trading has resumed to normal and this will be important for further loading and discharging activities.
Other important elements to watch are the costs for operational activities of chemical tanker operators. Bunker, the main components of the operational costs contributing between 25 – 35% of the total costs and the single largest cost element for a tanker has declined substantially over the past few months. This is coupled with the decline in the overall costs inherent in shipping companies monthly expenses such as maintenance costs, docking costs as well as some other substantial costs.
Fuel costs had dropped 70% from highs of $700/tonne (€518/tonne) FOB (free on board) Rotterdam in July to just over $200/tonne FOB Rotterdam in December. Bunker fuel is directly linked to crude oil and was expected to remain at current price values over the coming months.
The Asia-Pacific region was one area where brokers remained positive as tonnage was seen open in December. Chinese requirements for nitrobenzyl alcohol (NBA), mono ethylene glycol (MEG), paraxylene (PX) and orthoxylene (OX) suggested that demand could return in early 2009, making the route more lucrative, a source said.
However, the International Monetary Fund (IMF) predicted that growth in 2009 in emerging economies such as China was on the decline and would not compensate for recessions in developed countries. All will depend on how other emerging economies fare.
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment