North America chemical shipping market worth $339 bn by 2027

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North America chemical shipping market worth $339 bn by 2027

Post by bejoy »

North America chemical tanker shipping market size was valued at $259.2 billion in 2016 and is expected to reach $339.5 billion by 2027, according to a new report by Grand View Research Inc.

The increase in North American chemical export coupled with rising demand for plastic feedstock is projected to spur the growth during the forecast period. The decrease in crude oil prices is allowing ship owners to operate on a better profit margin as bunkering cost is low.

Due to the low energy costs prevailing, there is a trend of increasing the capacity size and production size in North American petrochemical refineries. A shift towards shale gas/oil refining in the current low-priced energy market is further favouring the increase in the waterborne transport services in the North American region.The growing trade of ethylene, methanol, and paraxylene from Canada, Mexico, Belgium, and China is anticipated to boost North American shipments industry. A significant demand for crude & vegetable oils and necessary chemicals from US and Mexico are some of the other factors influencing the global waterborne shipping business.

However, owing to high dollar exchange rates and chances of renegotiation of the NAFTA (North American Free Trade Agreement) can pose a threat to sell dynamics of this region. As of 2017, the spot prices are estimated to be trending low due to stockpiling of chemicals which are hurting the freight charges of the marine transportation market. Speculations of an oversupply of tankers in this region are further promoting lower transportation costs resulting in weak growth of in this sector.

A significant amount of chemical and crude oil exports occurs from Canada and Mexico. 8 percent of Canada’s manufacturing industry comes from the chemical sector. In 2015, the country’s chemical exports were estimated at $ 36.27 billion and Mexico’s $10.47 billion. Owing to NAFTA, US, Canada, and Mexico are contracted to have free trade with each other. As a result, a significant amount of trading occurs between the three nations.

The shipping industry is expected to be driven by innovation, capital, and operational efficiency. Innovative technological solutions such as coatings with enhanced cargo resistance and zero absorption properties are anticipated to optimize the ship’s earning potential. Tanker coating plays a key role in shipping of chemicals on account of its dangerous nature and different properties.

Fleet operators are developing vessels with suitable coatings to avoid any damage to vessels resulting from major accidents. Also, appropriate surface type helps in maintaining average age of the ships. Apart from the coating, the ships are now equipped with independent deck tanks for transportation of hazardous goods.

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