The chemical tanker market may have reached its bottom, and a fall in operating costs is protecting profitability in the sector.
The chemical tanker market may have reached its bottom, and a fall in operating costs is protecting profitability in the sector, according to an industry executive.
Chembulk Tankers president Jack Noonan described the mood in the chemical tanker market as "cautiously optimistic".
"I won't go so far as to say we'll see a rise again, but I think we've seen a bottoming out," he said at the Connecticut Maritime Association's Shipping 2009 conference.
Although revenues and volumes have "tailed off a bit", so have operating costs, particularly fuel, he noted.
"The price of bunkers and low interest rates - those two things have lessened the costs""The price of bunkers and low interest rates - those two things have lessened the costs, and therefore the profit margins have stayed relatively stable," Noonan observed.
Noonan said chemical tanker demand was bound to rise as inventories of chemicals in countries such as China have fallen and needed to be replenished.
Connecticut-based Chembulk owns 19 chemical tankers, including a newbuilding due this year. Noonan said the company has a further 10 vessels on order, with the first due for delivery in 2010.
Chembulk was formed in January 2007 and was acquired by Indonesia's Berlian Laju Tanker in December the same year.