HOUSTON (ICIS)--Ship broker Netco expects 2014 to be a year of recovery for the chemical shipping market, according to the company’s year-end report released on Friday.
The too-many-ships syndrome that plagued the industry for years has disappeared, with an “obvious void in new-building deliveries,” Netco said in its 2013 year end market report.
“Global demand is expected to increase by most predictions in 2014 and cheaper new US produced feedstocks will start to hit the export market with a fevered pitch by the second half of the year,” Netco’s report stated.
Another positive factor comes from new Middle East plant projects starting up during the year, which with stronger global demand should increase shipping activity as the new volume reaches deep-sea export.
The report added that Western Hemisphere chemical spot freight rate levels are currently higher than last year’s rates. Eastern Hemisphere freights are not quite the same, though they are showing some firmness.
“With all those pieces of the puzzle in place,” Netco concluded, “we predict that we will see a steady macro-strengthening of the global freight markets take place throughout 2014, culminating in a market peak for owners in 2015 before new deliveries start to flood the supply curve in 2016.”
Netco specialises in the transport of liquid bulk chemicals, vegetable oils, lubricants, and clean petroleum products. The firm has offices in Texas, Connecticut, and Singapore.