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| volume 7, issue #20 - 24-07-1998 | |
May 28, 1998 Despite the economic crisis in Asia, and the resultant depressing effect on trade volumes, the long-term prospects remain strong for chemical tanker shipments to and from the region.
Delegates to the MariChem Asia 98 conference in Singapore heard that the growth fundamentals - pro-growth government, high-saving rates, a cost-competitive workforce, increasing trade and huge markets - remain intact.
In addition, the near-term export of base and intermediate chemicals from Saudi Arabia and other Arabian Gulf countries to Asia will increase, as will intra-regional trade.
"Recent years have seen the emergence of fledgling chemical industries in Thailand and Indonesia," reported Chua Chye Poh, executive director of Eastport Maritime Pte.
He added: "Due to the lower freight costs, the export cargoes from these plants are competing successfully in the Southeast Asian market with product from more traditional sources. Thus, for the first time, intra-Southeast Asia cargoes are providing
owners with both front and backhaul cargoes."
This new trade has prompted Japanese chemical tanker operators to set up offices, or augment existing facilities, in Singapore, and to reallocate part of their fleet to service intra-Southeast Asia chemical movements.
Initially, this new tonnage will be used to replace some of the longer-haul shipments to the region they have lost but in the longer-term both intra-regional and deep-sea imports and exports will increase.
The regional chemical tanker trades in Asia are very competitive, with 15 significant operators and the top 2 - Iino Kaiun and Stolt Asia - supplying only 34 % of the tonnage.
In contrast, the two principal international chemical tanker operators carrying Asian imports and exports on deep-sea routes - Stolt and Odfjell - account for 51 % of the total fleet. -"In the longer-term more and more Asian chemical shipments will move under contracts of affreightment, at the expense of cargoes fixed on a spot basis," pointed out Mr Chua.
"The major international oil and chemical companies already prefer the contracts of affreightment option in order to guarantee delivery to customers on time and on specification," he said.
"In the future, as emerging regional chemical producers develop fully integrated industries, they, too, will seek the security offered by contracts of affreightment."
" A recent survey of shipowners trading in the region showed that, on average, approximately 24 % of an Asian owner's tonnage is contracted at the moment. This is below the world average but the trend is towards parity."
MariChem Asia 98 delegates also heard of the tremendous potential for chemical tankers offered by expected growth of the Chinese industry.
Taking BASF as an example, the German chemical major is already involved in 10 joint venture projects in China.
A proposed new project, the Nanjing integrated production site, calls for the movement of 1.6 mm tonnes of naphtha and 0.6 mm tonnes of chemical feedstocks into the plant
and the shipment out of 1.2 mm tonnes of bulk liquid chemicals.
BASF has surveyed the existing Chinese-flag coastal chemical tankers and found that only 13 are suitable for the carriage of its products.
"As domestic deliveries require to be moved in Chinese ships, we would anticipate the need for many new chemical coasters and barges in the years ahead," asserted Hans-Jurgen Wolf, division manager of Shanghai BASF Colorants.
"That is aside from the new tonnage that will be needed for the planned growth in China's international chemicals trade."
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