Chemical Tanker Shipping Market

Chemical Tanker Shipping Market Outlook 2031

The global chemical tanker shipping market size was USD 31.6 Billion in 2022 and is likely to reach USD 47 Billion by 2031, expanding at a CAGR of 4.5% during 2023–2031. The market growth is attributed to the growing demand for various industrial chemicals across different sectors.

Growing consumption of chemicals in industrial and commercial sectors is leading to a rise in the transportation of liquid chemicals in bulk. The expanding applications of chemicals in end-user industries are boosting the production concentration from manufacturers to meet the demand. The most common use of tanker shipping is for bulk transport of organic oil, vegetable oil, and petrochemicals. The adoption of next-generation technologies for logistics management is further expanding opportunities in the market.

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• As reported by the American Chemistry Council (ACC) in its Year-End 2022 Chemical Industry Situation and Outlook, the chemical industry in the US posted one of the best years in a decade. Chemical output from producers grew by 3.9% in 2022. Capital spending in the chemical industry rose by 9%, reaching USD 33.5 billion in total. The majority of spending was reported on upgrades, expansion, and sustainability.

Tankers are responsible for the major transport of bulk industrial chemicals across the globe. Chemical tankers are designed to mitigate the accidental exposure of chemicals to the environment. Based on the requirement, these tankers accommodate more than one type of chemical for transportation. Increasing trade activities in the chemical industry are boosting the use of chemical tankers as an efficient and reliable shipment method, thereby, fueling the growth of the market.

The research report finds that the COVID-19 pandemic hampered the chemical tanker shipping market. Consecutive lockdowns, implemented by various governments across the world, hampered operations across the industries. This reduces the demand for various chemicals from end-user industries, thus hindering the market.

Post the pandemic, the Russia-Ukraine war has severely stalled the market, owing to political conflicts and the weakening of the economic conditions. The market is likely to grow as soon as the conditions improve, owing to the essentiality of chemicals and their transportation mechanism. Companies with established systems and client bases are projected to be key beneficiaries once the existing situation improves.

Impact of Artificial Intelligence (AI) on the Chemical Tanker Shipping Market

AI is expected to propel market growth during the projection period, owing to the potential to improve process automation and operation optimization with this technology. It is creating new opportunities for the shipping industry to reduce risk, plan better schedules, improve operation safety, and enhance forecasting. With AI, the shipping industry is expected to keep evolving to transform operations for better optimizations and results.

• According to a survey published in early 2020, 40% of participants said that AI is likely to enhance inventory management in the transport and logistics industry. The ability of AI to understand complex real-time data dynamics, predict scenarios, suggest recommendations, and act accordingly is expected to benefit the industry in the coming years.

Chemical Tanker Shipping Market Dynamics

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Major Drivers

Growing consumption of organic and essential chemicals is expected to propel the market during the forecast period. Organic chemicals are widely used raw materials in various sectors including healthcare, pharmaceuticals, agriculture, food & beverages, the textiles industry, and others.

The rise in consumer demand for various products is driving industries to scale up their production levels. This, in turn, is expected to fuel the need for essential and organic chemicals such as Ethylene, Ethanol, Methanol, Propylene, Benzene, Acetic Acid, Calcium Carbonate, and Ammonia.

• As per the statistics published by Eurostat (European Statistical Office) in September 2023, with growing demand across industries, the European Union’s chemical trade grew significantly between 2021 – 2022. The imports and exports surged by 33% and 21% respectively during this period. EU’s major chemical trade partners were the US, the UK, China, and Switzerland in 2022.

Growing consumer demand for vegetable oils and fats is another key factor likely to lead the market growth during the assessment period. Most of these oils are used for cooking and for the production of diesel. The widely traded vegetable oils across the globe are soyabean oil, sunflower seed oil, palm oil, and canola oil/rapeseed oil. For international trade, transport of vegetable oils onboard is carried through chemical tankers with coated tanks and stainless steel in segmented parcels. Domestic transport is carried through small and sophisticated tankers with mild coating.

The major use of these oils is for food consumption, owing to their healthier characteristics as they contain higher unsaturated acid compared to animal fats.

Existing Restraints

Geopolitical conflicts and transporting explosion risks are likely to restrain the market during the forecast period. Disputes between nations result in trade restrictions, leading to hindrances in supply chain activities. The ongoing Russia-Ukraine conflict is one such, which adversely affected the logistic operations of the chemical industry.

Moreover, risks of explosion and leakage or overflow associated with tanker shipping are expected to increase regulations by various governments, thereby, resulting in the adoption of alternative solutions.

Emerging Opportunities

Leveraging new technology such as permanent magnet (PM) shaft generators is anticipated to create growth opportunities in the market. The use of this advanced equipment allows chemical tankers to depend on clean energy solutions. This significantly cuts emissions and allows the saving of fuel as well.

In addition, the introduction of methanol-powered chemical tankers and electric oil tankers is expected to expand opportunities for the players in the market. These tankers are energy efficient and optimized in design, as electric equipment designs are less complicated owing to fewer components.

Scope of the Chemical Tanker Shipping Market Report

The global research report includes an assessment of the market trends, market segments, and regional markets. Overview and dynamics have also been included in the report.

Chemical Tanker Shipping Market Segment Insights

Product Type Analysis

Based on product type, the chemical tanker shipping market is divided into inorganic chemicals, vegetable oils & fats, organic chemicals, and others. The others segment is further subdivided into additives, molasses, and lube oils. The vegetable oils & fats segment is expected to expand at the highest growth rate during the projection period, due to the growing demand for vegetable oils among the masses. The cooking oil transport is mainly carried through epoxy-coated tanker ships and portable tanks.

The consumption of vegetable oil is rising worldwide with the expanding awareness about its health benefits. These oils are used as raw materials in several other industries such as cosmetics and personal care for making skin products, perfumes, soaps, and candles. The rise in demand for products made using chemical-free ingredients is further likely to increase the trade of vegetable oil worldwide.

• According to the article published by the International Food Policy Research Institute (IFPRI) in May 2022, vegetable oils are heavily traded commodities accounting for nearly 40% of imports of global consumption. Worldwide, three-quarters of nations depend on vegetable oil imports to meet at least half the consumption need.

The organic chemicals segment is anticipated to grow at a rapid pace during the forecast period. The growth of the segment is attributed to the rising application of these chemicals in various key industries including healthcare, agriculture, and textiles. Rising awareness about the side effects of products having inorganic chemicals has resulted in the growing use of natural chemicals in daily consumer products. As a result, demand for shipping tankers for the transport of organic chemicals is expanding globally.

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Route Type Analysis

On the basis of route type, the global market is trifurcated into inland chemical tankers, deep sea chemical tankers, and coastal chemical tankers. The deep sea chemical tankers segment is projected to register a considerable CAGR during the forecast period, owing to their large number of segregations.

The size of these tankers ranges from 10,000 to 50,000 deadweight ton (DWT), as it is used for the export of large volumes of bulk chemicals. The demand is supported by the growing international trade of various chemicals and oils. The modernization and digitization of deep sea chemical tankers are expected to further propel the segment in the coming years.

Cargo Analysis

On the basis of cargo, the chemical tanker shipping market is segregated into IMO I, IMO II, and IMO III. The IMO II segment is expected to register a robust growth rate during the forecast period with respect to volume, owing to the use of these tankers for vegetable oils and fats shipping. These tankers are utilized for the transport of various chemicals that are widely in demand including alcohol, alkenyl amide, and alkanes. The growing industrial use of bio-based lubricants is anticipated to drive the demand for IMO 2 cargo.

• According to the International Maritime Organization (IMO), type 2 ship/cargo is a chemical tanker used for the transport of items that are appreciably severe safety and environmental hazards. The transport of these products needs considerable preventive measures to avert an escape of such cargo into the outer environment.

Fleet Material Analysis

On the basis of fleet material, the global market is bifurcated into stainless steel tankers and coated tankers. The coated tankers segment is projected to register a considerable CAGR during the forecast period, owing to their use for the transport of vegetable oils and organic chemicals. Epoxy, zinc, or phenolic are commonly used materials for tanker coatings. Chemical tankers with epoxy coatings are used for the transport of wines, vegetable oils, crude oils, lube oils, jet fuels,  gasoline, and others, as they are resistant to these chemical agents.

The stainless steel segment is anticipated to hold a key share of the market in the projected period, owing to its reliability in chemical transport. These tankers are widely used for the transport of various organic and inorganic chemicals. They are majorly used for shipping aggressive acid cargos including sulfuric acid and phosphoric acid.

Regional Outlook

In terms of region, the global chemical tanker shipping market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. Asia Pacific is projected to dominate the market during the forecast period, owing to the growing demand for chemicals in various end-user industries.

Factors such as growing industrial production and increasing chemical trade by emerging economies such as, India and China are supporting the market in the region. Chemicals used as raw materials for the production of fertilizers, paints, plastics, and textiles are in high demand. The transportation of these materials is carried through chemical tankers, which is boosting their use across major industries in this region.

• According to a survey published in September 2023, domestic sales of chemicals in Asia Pacific in 2022 were worth USD 2.9 trillion. The region stands leading in terms of chemicals sales across the world.

The market in North America is expected to grow rapidly in the coming years, due to the growing production of different chemicals coupled with a rise in trade activities. The shale gas revolution is transforming the chemical industry in the US. This resulted in the rise of chemical trade in the region. For instance,

• According to the report published by the American Chemistry Council, in 2022, the exports of chemicals in the US accounted for USD 179 billion, which is 10.3% of all the goods exported from the nation. Rapid adoption of digital technology, such as intelligent transportation systems, and advanced equipment by various chemical tanker shipping companies across the region is propelling the market.

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Segments

The global Chemical Tanker Shipping Market has been segmented on the basis of

Product Type

• Inorganic Chemicals
• Vegetable Oils & Fats
• Organic Chemicals
• Others
  • Additives
  • Molasses
  • Lube Oils

Route Type

• Inland Chemical Tankers
• Deep Sea Chemical Tankers
• Coastal Chemical Tankers

Cargo

• IMO I
• IMO II
• IMO III

Fleet Material

• Stainless Steel Tanks
• Coated Tankers

Region

• Asia Pacific
• North America
• Latin America
• Europe
• Middle East & Africa

Key Players

• Stolt-Nielsen
• Arkema
• Stena Bulk
• MAERSK TANKERS A/S
• Odfjell
• Sinochem Holdings Corporation Ltd.
• AceTankers
• Ultratank
• MOL CHEMICAL TANKERS PTE. LTD.
• HANSA Tankers
• IINO KAIUN KAISHA, LTD.
• Navig8
• Team Tankers International
• Fairfield Chemical Carriers
• Alaska Tanker Company
• Seatrans Group
• DuPont
• PT BERLIAN LAJU TANKER TBK

Competitive Landscape

Key players competing in the Chemical Tanker Shipping Market are Stolt-Nielsen; Arkema; Stena Bulk; MAERSK TANKERS A/S; Odfjell; Sinochem Holdings Corporation Ltd.; AceTankers; Ultratank; MOL CHEMICAL TANKERS PTE. LTD.; HANSA Tankers; IINO KAIUN KAISHA, LTD.; Navig8; Team Tankers International; Fairfield Chemical Carriers; Alaska Tanker Company; Seatrans Group; DuPont; and PT BERLIAN LAJU TANKER TBK.

These chemical tanker shipping companies implemented development strategies including mergers, acquisitions, partnerships, collaboration, product launches, upgrades, and production expansion to expand their client base worldwide. The competitive landscape covers key insights into growth strategies adopted by major market players.

• On September 12, 2023, MOL Chemical Tankers Pte. Ltd. acquired the business of Fairfield-Maxwell Ltd. The agreement is approved by both companies' board of directors. The deal is agreed upon USD 400 million all-cash transaction enabling 100% acquisition of the Farfield-Maxwell Ltd.

• On October 5, 2022, Stena Bulk, a major tanker shipping company announced the launch of a two-year, three-phase project REMARCCABLE, which demonstrates shipboard carbon capture. The company’s Medium Range (MR) IMOIIMAXX tankers will be installed with a system for carbon capture.