Relative to the larger semi-ref vessels, the ethylene vessel fleet has enjoyed a somewhat more stable year, supported by a tight Asian ethylene market, and increasing exports out of the Americas. Middle East exports, another key driver of the ethylene shipping market failed to give the market the needed momentum in the first half of 2016 caused by various production issues. However, delayed cracker startups in the region led to higher export volumes than expected in the second half of 2016. Towards the end of the year, all but the larger semi-ref rates recovered significantly.
A new development in 2016 was the opening of the first ethane export terminal in the US, which so far did not affect the regular petchem trade, as a dedicated ethane fleet with mainly larger tonnage (midsize +) is building up.
A total of seven handysize semi-ref vessels were delivered in 2016, while 4 semi-refs were scrapped, including only one handysize vessel. On the ethylene side, only three vessels were added to the fleet in 2016, one handy size vessel and two smaller ethylene vessels (12 000 cbm), while two ethylene vessels were scrapped. The trend towards larger vessels is continued and reflected in the current orderbook that contains mainly larger tonnage. On the back of the market’s development and the substantial amount of the deliveries, it is not surprising that only one vessel (13,000 semi-ref ) was ordered.
For the dedicated ethane trade segment, five midsize vessels were delivered, in addition to two very large ethan carriers.
Looking ahead, a challenging LPG market and a high number of deliveries in the semi-ref fleet is expected to put further pressure on the market. A support for ton-mile demand from increased US ethylene and propylene exports and a limited orderbook on the ethylene side should however stabilize the market going forward. The intensified long-haul trade from the Americas towards Asia can be evaluated as a positive sign for the larger ethylene vessels going forward.