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SIZE IS IMPORTANT CONSOLIDATION • SMALL AND NIMBLE OR BIG AND POWERFUL? THERE’S ROOM FOR BOTH AS CONSOLIDATION IN THE CHEMICAL TANKER SECTOR GAINS PACE AT A TIME of great volatility in global chemical supply chains, it is tempting to take the view that agility is the best response, allowing logistics operators to respond quickly to changes in demand patterns. But there are plenty in the chemical tanker sector who take an opposing view; after all, the demand is there, even if trade flows are changing rapidly
Odfjell, noted that the past five years have witnessed a gradual increase in consolidation within the core chemical tanker fleet, a trend that he expects to continue at a time when financial investors are in divestment mode. The chemical tanker sector is highly fragmented and the spot market is competitive but, Hammer explained,
in response to underlying product demand and supply issues, with the ripples of the ongoing Covid-19 pandemic, port constraints and weather-related disruptions all playing a part this year. Speaking recently to investors, Bjørn Hammer, global head of tanker trading at
consolidation is pivotal to removing that fragmentation to make the contract of affreightment (COA) market more dependable – something that will be vital to the financial health of the major players in the sector. Therefore, developing a larger fleet helps operators to adapt to changing demand
HCB MONTHLY | SEPTEMBER 2021
patterns, by having more ships at their disposal, and to attract more COA business by offering a reliable service. Focusing more on longer-term contracts provides a great deal of protection against volatility in the spot market, which for chemical tankers often reflects the behaviour of the clean product (CPP) trades and the volume of swing tonnage looking for easy chemical cargoes. The chemical tanker sector is also currently enjoying the fruits of an historically low orderbook, which stands at under 5 per cent of the existing fleet. Consolidation helps the major owners keep a lid on speculative ordering and this is being reinforced by the position of financial investors and by the uncertainty caused by the need to address as yet loosely defined future environmental performance standards. GREENER TOGETHER That drive for sustainability also helps explain the current trend for consolidation. Chemical tankers are expensive pieces of machinery that are designed with a long working life in
