French orders to foreign shipyards

The
chemical
carrier market
in 1999
Both coastal and deep-sea transport of chemicals were
severely affected by the Asian crisis of the final quarter
of 1997. The negative effects of the crisis and the influx
of newbuilding ships, whose construction had been spurred
by Asian market optimism in 1995-1996, combined to
continue to drag down the world market for chemical
transport even into this year.
Although freight rates were generally low over the first
six months of the year, and even dipped to record levels
in the beginning of 1999, since September, an increase
in demand within several markets has resulted in a slight
improvement of rates. Nonetheless, there are still many
vessels available on the market and new orders will be at
high levels through mid-2000.
Over the last six months, transport volumes have improved,
and this trend should be confirmed in the final quarter.
In the medium term, tangible signs of improvement in
the Asian and pacific nations’ economies should solidify
this recent upward tendency in volumes. An increase
in volumes should appear in the last months of the year
with the seasonal restocking periods and the onset of winter.
Newly built ships entering the market in1999 nevertheless
slowed this firming up of the markets. It may be expected
that the large pool of available ships will act as a deterrent
to rising freight rates in the coming months.
Volumes in the northern Europe market picked up slightly over
the last two months of this year, following a period of decline
at the beginning of the year. Although some shipowners’
vessels were idle at times, on the whole ships were kept
busy during this period. Competition for spot cargo fell compared
with the first six months of the year, resulting in a
slight improvement of the freight rate. Very broadly, the freight
rates for 3,000 tonne cargoes of easy chemicals on
Rotterdam/ East Coast UK route rose from 5 to 10% compared
with $11-12/tonne levels prevalent in March of this year.
With regard to volumes, the trades from northern Europe
to the Mediterranean were slightly improved, generating
modest increases in freight rates.
In the northern Europe/Mediterranean direction, freight
rates for 3,000 tonne cargoes of easy chemicals rose
from $25-26/tonne at the beginning of the year to
$26-27/tonne at the end of September.
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