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Ardmore sees strong product and chemical tanker rates

  • Market: Freight, Oil products, Petrochemicals
  • 16/02/24

Product and chemical tanker owner Ardmore said this week that rates are likely to be boosted from large-scale geopolitical and climate-related trading restrictions that are are accentuating tight supply and demand fundamentals.

The company's medium range (MR) tankers earned $32,500/d for the fourth quarter of 2023, with 60pc of the first quarter of 2024 booked at $35,400/d. Its chemical tankers earned $26,100/d for the fourth quarter of 2024, with 70pc of the first quarter booked at $26,700/d.

Disruptions at the Red Sea and Panama Canal have added to the tonne-mile impact of the EU's embargo on Russian imports, Ardmore said. Rerouting of vessels via the Cape of Good Hope to avoid the Red Sea has increased voyage lengths by up to 70pc, it said. EU diesel inventories are approaching historic lows as a result of the EU ban on imports of Russian refined products, Ardmore said, and the company expects a further boost in EU import tonne miles as inventories normalise.

Ardmore expects demand to be strong in the product and chemical tanker markets, driven by continued growth in oil demand as the global economy recovers from the Covid-19 pandemic and strong increases in petrochemical consumption.

A trend of refinery expansion in Asia-Pacific will further boost tonne-mile demand to the west, and new petrochemical plants opening in 2024-30 and a growing trade in edible oils from Asia to Europe will support chemical tanker trades.

A historically high average fleet age and low orderbook will further bolster product tanker rates, Ardmore said.

Ardmore made a profit of $26.1mn for the final quarter of 2023, compared with $53.1mn a year earlier.

By Matthew Mitchell

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22/12/25

Viewpoint: BZ demand to see little change in 2026

Viewpoint: BZ demand to see little change in 2026

Houston, 22 December (Argus) — US benzene (BZ) demand is expected to remain steady in the first quarter of 2026 because of low operating rates for BZ derivatives, sources said. Operating rates for BZ derivatives were low in 2025 because of weak demand and a busy turnaround season, with several styrene monomer (SM), cumene and phenol producers conducting turnarounds. At least one US Gulf coast styrene producer is expected to perform a turnaround in the first quarter that is estimated to run 20-30 days, another source said. Ethylbenzene (EB) demand into gasoline blending may finally see its seasonal lull, as high-octane, low-Reid vapor pressure (RVP) blendstocks are typically in low demand from October-March, when US gasoline specifications allow high-RVP blendstocks like butane to enter the blend pool. In late 2025, EB demand remained steady into gasoline blending because of strong demand for high-octane aromatic blendstocks to offset low-octane light naphtha, which was blended into the gasoline pool to keep up with the demand for US gasoline exports. But, with expensive feedstock BZ heading into 2026, EBSM producers cannot sell EB above breakeven levels, which caused EBSM producers to reduce operating rates, sources said. When spot BZ reaches a premium to feedstock reformate prices, EB becomes a less competitive blendstock because of its production cost ( see chart ). This disposition of ethylbenzene's value as a blendstock opens competition for other aromatic blendstocks like toluene and mixed xylenes to enter the gasoline pool. North American EBSM operating rates are expected to remain at 48-60pc in early 2026, according to a generic Argus model with operating rates informed by market participants. SM export demand is anticipated to remain limited. The arbitrage to Europe is closed for December-loading cargoes to arrive in January, Argus data show. Buying interest could emerge from Latin America, which typically takes 20,000-25,000 metric tonnes (t) of SM from North America every two or three months, depending on polystyrene (PS) production rates. Cumene demand is expected to remain flat in 2026 on steady, though sluggish, downstream demand for phenol and acetone, which have big shares in the construction, automobile, appliances and resin industries. A source said sellers are taking customers' spending and borrowing power into deeper consideration when exploring spot and new contract opportunities to mitigate selling risk. Phenol is anticipated to see little fundamental change in 2026, sources said. There are few expected phenol turnarounds for maintenance in the first half of the year, and sources expect consumption to remain comparable to 2025. New housing permits declined in 2025 compared to 2024, according to US Census Bureau data, which led to fewer homes being built and less phenol demand. About half of all phenol produced in the US goes into the construction sector. Phenol and cyclohexane demand from the automotive industry may decline in 2026 on lower automobile manufacturing leading into the new year. Domestic automobile production trailed lower throughout 2025 as many producers were operating below full output rates. In August, US automobile production dipped below 100,000 units for the first time since January, according to the US Bureau of Economic Analysis (BEA). Before January, monthly domestic automobile production last dipped below 100,000 units in September 2021. The automotive industry makes up nearly 22pc of phenol consumption. Benzene supply is expected to remain low in 2026 on reduced US production and fewer imports because of US tariff policies that add costs for traders. On production, some market participants expect selective toluene disproportionation (STDP) unit operating rates to remain low in 2026 because BZ prices rose in late 2025 on tight supply, not strong demand, sources said. Though STDP margins look healthy on paper moving into 2026, if STDP operators raise production rates, the higher BZ supply would depress prices and margins to the point where STDP operators decide to turn run rates down again or idle their units, another source said. The US is historically in a net BZ deficit and usually relies on BZ imports to add supply when BZ production lags demand. With US tariff policies adding costs to those imports, shipments of BZ from Europe and Asia have largely declined. Market participants said they expect this trend to continue in 2026 without changes to US tariff policy. By Jake Caldwell Ethylbenzene economics vs Benzene and Reformate $/t Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Viewpoint: US housing to stymie chlor-vinyl in 1H 2026

22/12/25
News
22/12/25

Viewpoint: US housing to stymie chlor-vinyl in 1H 2026

Houston, 22 December (Argus) — An anemic US housing market is expected to continue restraining domestic demand for polyvinyl chloride (PVC) and chlor-alkali during the first half of 2026, prompting US producers to push more PVC into the export market. US Federal Reserve policymakers have cut their target interest rate three times since September, but market participants do not expect lower borrowing rates to significantly boost demand for housing — a major PVC derivative market — until the peak of construction season next summer at the earliest. To mitigate further price erosion and excess inventories, producers are expected to increase export sales, especially to India. PVC producers expect the Fed will continue to cut interest rates in 2026 to help stimulate the domestic housing market, which was listless this year on rising prices and elevated mortgage rates. But producers may be disappointed, as Fed policy makers have penciled in just one quarter-point rate cut for next year. Lower Fed target rates can influence borrowing costs for mortgages, business loans, and other expenditures in the homebuilding sector. Interest rates for a traditional 30-year fixed mortgage have remained above 6pc since September 2022, contributing to housing affordability issues that stretch back to 2021, according to data from Federal Reserve banks in St Louis and Atlanta. Housing starts have been weak in the past three years as mortgage rates surged. Starts were at a 1.31mn unit annual pace in August, down from about a 1.6mn rate in 2021-2022. US home builders have little incentive to develop new units, which in turn could support higher home prices in 2026 as homebuilding continues to be outpaced by a growing population. Meanwhile, weak housing demand and construction activity has left US PVC producers to manage an oversupplied domestic market, weighing on spot export prices and likely maintaining headwinds through the first quarter of 2026. Spot export prices have been rangebound from $550-595/metric tonne (t) fas Houston since mid-October, as US exporters vie with competitive Chinese volumes into India — the largest global importer of PVC. Exports from the US to India are anticipated to rebound in 2026 as much of the regulatory headwinds that crimped shipments this year are largely resolved. India earlier this year required foreign exporters to have their plants inspected and certified by the Bureau of Indian Standards (BIS) by June, which was eventually delayed to the end of the year. India in early November dropped those requirements, but confusion around the shifting BIS deadlines led US producers to limit shipments to India. Additionally, India approved preliminary anti-dumping rates on US and Chinese PVC exports but failed to fully implement the penalties — effectively eradicating the last trade barrier into the country. US PVC exports to India in January-September this year fell by 68pc from the same nine-month period last year, according to US Census Bureau trade data compiled by Global Trade Tracker (GTT), largely because of various regulations and evolving trade policies. Exporters, though, are expected to reclaim lost market share in India in 2026, especially as the US housing market is anticipated to remain weak until the third quarter. Increased exports should help draw down inventories early next year, after suppliers grappled with excess inventory and multi-year price lows. The export market may become more important to US producers if domestic demand remains weak. This is due to OxyChem's expanded Battleground plant in La Porte, Texas, coming on line by the end of 2026 or early 2027 and US chlor-alkali producer Olin focusing expansion plans on the PVC market. Caustic soda prices A bearish PVC market to start 2026 is expected to lend price support to caustic soda prices for fully integrated producers. Caustic soda is co-produced with chlorine, a critical feedstock for PVC manufacturing, and producers can increase caustic soda prices to preserve electrochemical unit (ECU) margins during periods of bearish PVC and chlorine market conditions. An ECU is comprised by 1t of chlorine and 1.1 dry metric tonnes (dmt) of caustic soda. Domestic producers and distributors raised caustic soda prices in monthly contract negotiations for much of 2025, helping to offset incrementally lower chlorine settlements, despite building caustic soda inventories during the second half of the year. Domestic caustic soda inventories are poised to end the year at elevated levels following an estimated 5-10pc cut in US consumption and largely steady production for much of 2025. But to sustain a pricing strategy that maintains value in caustic soda, suppliers with deep-water access are expected to boost exports in 2026, primarily to Europe and Brazil, or peel back operating rates. Further caustic soda price support next year is anticipated to be drawn from rising natural gas prices for electricity generation, which comprises about 70pc of total ECU variable costs in the US Gulf coast region, Argus estimates. Average natural gas costs into electricity are forecast to climb by nearly 8pc next year to $4.20/mmBtu, according to the US Energy Information Administration's Short-Term Energy Outlook . By Connor Hyde and Gordon Pollock Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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P66, Kinder expand proposed western US fuel pipeline

22/12/25
News
22/12/25

P66, Kinder expand proposed western US fuel pipeline

Houston, 22 December (Argus) — Independent refiner Phillips 66 and midstream giant Kinder Morgan are expanding a plan for a proposed refined products pipeline system from the midcontinent to western US markets. An initial open season for the project, which closed on 19 December, resulted in significant interest, including shipper commitments for the proposed Western Gateway pipeline, the companies said Monday. As a result, a second open season will launch in January for remaining capacity and will include new destinations west of Colton, California, through a joint tariff with Kinder Morgan's existing SFPP pipeline that will be reversed between Watson, California, and Colton, allowing access to Los Angeles markets. The companies did not disclose the length of the second open season. The Western Gateway project, announced in October, includes a new 200,000 b/d pipeline from Borger, Texas, to Phoenix, Arizona, combined with the reversal of SFPP from Colton, California, to Phoenix, Arizona. Philips 66 owns and operates a 149,000 b/d refinery in Borger. In addition, the Phillips 66-operated Gold pipeline, which currently flows from Borger to St Louis, Missouri, would be reversed to allow refined products from midcontinent refineries to flow south to Borger and supply the Western Gateway system. The companies expect the Western Gateway project to be completed in 2029. The proposed pipeline system comes as two large California refineries are planning to close, including Phillips 66's 139,000 b/d Los Angeles refining complex. Phillips 66 stopped processing crude at the Los Angeles facility in mid-October as part of a planned shutdown announced about a year earlier. It expects to idle remaining units by the end of this month. In addition, Valero is planning to shut down or repurpose its 145,000 b/d refinery in Benicia, California, by April 2026. The planned closures have triggered major concerns about California's tight and often volatile oil products market and the impact on neighboring states . Another large US midstream company, Oneok, is considering building a 200,000 b/d pipeline — the Sun Belt Connector — to carry gasoline, diesel and jet fuel from El Paso, Texas, to Phoenix, Arizona. In addition, US independent refiner HF Sinclair is considering several pipeline expansions that would move more refined products from the Rocky Mountains region to markets further west. By Eunice Bridges Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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German fuel demand rises before 2026 price increase

22/12/25
News
22/12/25

German fuel demand rises before 2026 price increase

Hamburg, 22 December (Argus) — German consumers increased fuels orders in the last full working week of 2025 to fill their tanks ahead of a probable price increase at the start of the new year. Low prices also boosted heating oil demand. Fuel demand rose significantly in the week ending 21 December, after stockbuilding failed to materialise in the previous week. Diesel spot sales for truck loading submitted to Argus increased by almost 50pc on the week, and E5 gasoline sales by 35pc. Diesel sales on 17 December were the highest in four months, while gasoline sales were the highest since September 2023. Gasoline filling stations, freight forwarders and other large-scale consumers waited until the last minute to fill their tanks before higher costs from the CO2 tax and greenhouse gas (GHG) quota take effect in 2026. Sellers recently offered B7 diesel for loading in January with premiums of €10-13/100l, and gasoline prices rose by a similar amount. Gasoline filling stations built up stocks ahead of the holidays, because the few remaining working days until the end of the year restrict logistics. Low prices also drove heating oil demand, at least in the first half of the week. The national average heating oil price reached its lowest point for the year on 16 December. This motivated consumers to buy, although the premiums for the new year are much lower than for road fuels at around €3-4/100l because of the CO2 tax increase. But some can only be delivered in January because of logistical bottlenecks. Heating oil spot volumes in 2025 so far are around 10pc above the 2024 level, mainly because consumers stocked up when the front-month Ice gasoil futures contract reached its lowest level since the end of 2021 in early April. The heating oil price fell to its lowest level in more than three years. Prices were subdued by the prospect of a global economic slowdown as a result of the trade conflict between the US and China and the so-called reciprocal duties for some of the US' most important trading partners. Lower Ice gasoil futures also triggered additional purchases at the end of November. Diesel spot volumes in 2025 were around 5pc below the previous year, probably because of a weak manufacturing sector. The average production index in January-October was almost two percentage points below the same period in 2024 and about six points below 2023. The truck mileage index lagged behind previous years in most months, with a noticeable affect on industrial demand for diesel. By Gabriele Zindel and Johannes Guhlke Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Mexico central bank cuts target rate to 7pc

19/12/25
News
19/12/25

Mexico central bank cuts target rate to 7pc

Mexico City, 19 December (Argus) — Mexico's central bank cut its benchmark interest rate by 25 basis points to 7pc, its lowest level since June 2022, maintaining a slower pace in the easing cycle on inflation concerns. The decision marked the eighth rate cut this year and the fourth quarter-point reduction following four consecutive half-point cuts. This year's cuts follow five quarter-point cuts in 2024 from a cyclical peak of 11.25pc in March. The board approved the cut in a 4-1 vote, with deputy governor Jonathan Heath dissenting in favor of holding the rate at 7.25pc. Heath has been the lone dissenter in the past five decisions, consistently urging greater caution. The central bank said the decision reflected "the behavior of the exchange rate, the weakness of economic activity and the possible impact of changes in global trade policies," repeating language used in its last four statements. Gabriela Siller, chief economist at Banco Base, pointed to a "significant change" in the bank's forward guidance, noting a shift toward a less dovish tone. The board said it "will consider when to make further adjustments" to the policy rate, replacing the "will consider cutting" language used in November. Mexican bank Banorte also said the central bank struck a less dovish tone, pointing to a change in its forward guidance. Annual inflation rose to 3.8pc in November from 3.57pc in October, according to statistics agency Inegi. Core inflation, which excludes volatile food and energy prices, accelerated to 4.43pc from 4.28pc. The central bank now sees headline inflation ending 2025 at 3.7pc, up from 3.5pc in its November forecast, while core inflation is projected at 4.3pc, revised from 4.1pc. It also raised its headline and core forecasts for the first two quarters of 2026, while maintaining that both will converge to its 3pc target by the third quarter. The bank said the revisions mainly reflect a "more gradual-than-expected" easing in services inflation, along with a smaller contribution from accelerating consumer goods prices. The board also addressed recent tax reforms, which it expects will have a temporary and not necessarily proportional impact on prices, adding it will update its forecasts as it conducts a comprehensive assessment of the revised tax code's effects. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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