Chemical tankers ready to benefit from 2020 changes
The Naval Architect: November 2019
Defining a chemical tanker is simple enough if the only criteria is if an IMO type I, II, or III designation has been assigned. Type I ships are the pure chemical carriers as their design is based around the requirements of the most hazardous cargoes. Type II and III ships are less specialised, and a very high percentage will be destined to spend most of their lives operating as product tankers carrying oil refinery production, even though they may be defined as a chemical or chemical/products tanker.
This versatility looks to be much in demand in the future as the impact of the IMO sulphur cap begins in January 2020. Chemical tankers will be hit just as hard though by the changes and expected fuel cost rises as other ship types. However, they will find benefits as well, given that they will transport the myriad of new fuels from refineries to bunker storage facilities.
That opportunity was likely very much uppermost in the minds of chemical tanker owners who have been quite bullish in placing orders in recent years. They have also sent relatively few vessels to the scrapyard since the IMO announced the 2020 date for the sulphur cut.
Currently, the world fleet of in-service vessels comprises 5,581 ships totalling 117,409,115dwt tonnes and the orderbook is made up of 340 vessels for a total 9,066,626dwt, according to IHS Markit data. Testifying to the confidence in the sector, deletions since the beginning of 2015 amounts to only 164 ships with a combined deadweight of 3,213,209tonnes. There may of course be a spike in scrapping figures over the next few years as the requirement to fit ballast treatment systems begins to make an impact.
Chemical tankers are generally the smallest of the tanker types with a very high proportion of the world fleet under 10,000dwt. Being smaller vessels, many of them already operate on MDO or MGO rather than HFO, so the changeover in 2020 will be less of a financial shock. In terms of numbers, vessels under 10,000dwt in the in-service fleet comes in at 2,364 or 43%. When added to the other vessels between 10,000 and 30,000dwt, the figures rise to 3,737 or 68%.
In deadweight figures, the smaller size vessels obviously lose the advantage of numbers. Ships under 10,000dwt account for only 9.8mdwt or just over 8%. On the other hand, there are just 1,367 vessels above 40,000dwt, yet they account for almost 67mdwt or 57%. The bulk of the larger vessels – some 1,027 ships – fall in the 40,000-50,000dwt range and between them total 48.7mdwt.
Orderbook and recent deliveries
The leading positions in the newbuildings orderbook sees China take top spot with 133 vessels for 3.5mdwt followed by South Korea with 61 vessels for 2.6mdwt and Japan with 84 ships but just 1.6mdwt. Turkey sits in fifth place and has a small orderbook of 13 ships for only 99,320dwt. Vietnam, in sixth place as far as the in-service fleet, has moved to fourth place in the orderbook with 20 ships for 861,896dwt.
Chemical tankers rarely hit the headlines for innovation in design or construction but that is not to say that they are lagging behind other ship types. For example, in April 2016, Lindanger became the first chemical tanker built specifically to run on methanol. The 50,000dwt vessel built by Hyundai Mipo was the first of a seven-ships series with the last – Creole Sun – due for delivery later this year. This year has already seen the delivery of three ships in the series, Mari Couva, Mari Kokako and Takaroa Sun. The series mainly carry methanol as cargo with one of the slop tanks set aside for use as fuel for the MAN 6G50ME-C9-LGIM main engines.