Chemical tanker rates reach multiyear highs

Chemical tanker rates have reached their highest levels in at least eight years because of strong demand for chemicals and biofuels shipments, particularly those originating in Asia, and constrained tonnage supply.

The US Gulf coast to Itaqui, Brazil, rate for 10,000-20,000 metric tonne shipments has reached $96.75/t, the highest level since Argus began the assessment in May 2014.

"Chemical tanker rates improved across all regions to levels not seen since 2007," according to chemical tanker owner Odfjell, which cited data showing US-Europe, US-Asia and intra-Asia rates at their highest levels since at least the beginning of this year.

The market's strength is derived from less competition from refined product tankers, reduced speed to tackle high bunker costs and supply imbalances between the eastern and western hemispheres, all of which has limited availability, according to the shipowner.

Elevated rates for refined product tankers, which have also hit highs recently, have caused some energy traders to charter chemical tankers for refined product cargoes. Such cargoes accounted for 5pc of Odfjell's cargoes in the second half of 2022, compared with only 1pc in the first half of the year.

Aside from a modest increase in demand for carrying fuel, demand has ticked up for chemicals cargoes, biofuels, soybean oil and palm oil, said Odfjell.

By Nicholas Watt