June 18, 2024
Chemical Tanker Market

Chemical Tanker Market is Estimated to Witness High Growth Owing to Increased Maritime Trade

Chemical tankers are ships built with compartments that are specifically designed to transport chemicals in liquid and gaseous forms. They are commonly used worldwide to transport a wide range of chemical products including petrochemicals, edible oils, vegetable oils, acids, bases, organic and inorganic chemicals. The rising global demand for chemicals and petroleum products from oil refineries has led to an increase in transportation of chemicals by sea. The global chemical industry has witnessed steady growth over the past few years leading to an expanding trade of chemicals worldwide and a rise in operational requirement of chemical tankers, especially for long-haul routes.

The Global chemical tanker market is estimated to be valued at US$ 36.16 Bn in 2024 and is expected to exhibit a CAGR of 4.5% over the forecast period 2024 To 2031.

Key Takeaways

Key players operating in the chemical tanker market are JO Tankers, IINO KAIUN KAISHA Ltd., Eitzen Chemical, Tokyo Marine Asia Pte Ltd., Berlian Laju Tanker, Nordic Tankers, Seatrans chemical tankers, Navig8 Chemicals, Stolt-Nielsen Ltd, and Odfjell. Key players are focused on expanding their global presence and fleet capacity through mergers and acquisitions.

The rising global demand for chemicals and petroleum products along with growth in maritime trade is expected to present lucrative growth opportunities for stakeholders. Chemical transportation requirements are estimated to rise significantly in Asia Pacific and Middle East regions.

Technological advancements in engine efficiency, navigation, and coating technology have improved the eco-friendliness, safety and lifespan of modern Chemical Tanker Market Trends  The increasing focus on reducing greenhouse gas emissions from shipping activities is expected to fast-track the adoption of environment-friendly technologies in chemical tanker fleet.

Market drivers

The growing chemical industry output across regions is the primary factor driving the demand for chemical tankers over the forecast period. Expanding global fleet capacity and rising seaborne trade volumes have increased the dependence on waterways for transporting chemicals cost-effectively over long distances. Stringent environmental regulations regarding emission control from shipping and expansion of refining capacity worldwide are also expected to boost the demand for advanced chemical carriers.

Current challenges in the chemical tanker market:

The chemical tanker market is currently facing several challenges that are hindering its growth. One of the major challenges is the increasing regulations regarding ballast water management and sulphur emissions. Strict rules imposed by IMO 2020 are pushing up compliance costs for ship operators. Secondly, overcapacity in the market and low freight rates are negatively impacting the profitability of ship owners. Geopolitical tensions and trade wars are also impacting the demand and trade flows of chemicals. Fluctuations in oil prices pose risks to the demand and supply dynamics of the market. An economic slowdown can further reduce the need for transportation of chemicals.

SWOT Analysis

Strength: Diversified product portfolio and global fleet presence mitigate demand and trade route risks. Economies of scale from large fleets of specialized vessels.
Weakness: Heavy reliance on global economy and trade flows makes the market vulnerable to downturns. High fixed costs due to sophisticated tanks and equipment onboard ships.
Opportunity: Growth in chemicals trade driven by oil and gas, petrochemical, and fertilizer demand in Asia Pacific and Middle East. Investments in specialty vessels for niche chemical cargoes.
Threats: Stringent environmental regulations increasing compliance costs. Overcapacity depressing freight rates.

The North American region currently leads the global chemical tanker market in terms of value, accounting for over 35% share. Presence of large petrochemical industries and exports from USA and Canada propels the demand for transportation of chemicals via sea routes within and outside the region.

The Asia Pacific region is expected to witness the fastest growth in the chemical tanker market during the forecast period. Rapid industrialization and expanding chemical production capacities especially in China, India, and Southeast Asian countries are augmenting the need for chemical shipping. Growth in LPG and LNG trade between Asia and the Middle East is another key driver.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it.