Chemical tanker owners have good reason for optimism after a couple of bleak years, according to UK shipbroker Braemar ACM.

The company’s lead chemical analyst, Ben Cooke, told TradeWinds: “We are entering a very interesting time in this market.”

Last summer, Braemar launched a joint venture with Womar Chemical Tanker Pools that aimed to independently benchmark the earnings of the deepsea J19 market, covering stainless steel ships between 19,000 dwt and 22,500 dwt.

The company has now revised its projections up to 2030, and believes the sector is set to rebound over the next two years

Volumes should return to pre-Covid levels this year, the broker said.

“The J19 ship segment, which we believe is a good bellwether for the entire deep-sea chemical market, has had almost two years of depressed earnings,” Cooke explained.

Although there have been signs of improvement in recent months, the market still faces significant hurdles in 2022, the main issues being bunker and general operating expenses, the persistence of Covid-19 restrictions, and the impact caused by sustained and rising inflation, he argues.

“This all has the potential of delaying a full recovery until 2023,” Cooke said.

“Despite this, beyond 2023 there are some very positive signs for shipowners,” the analyst added.

He points to high newbuilding prices, the lack of yard space due to container ship and dry bulk ordering, and new environmental regulations on the horizon.

Fleet dwindling for first time ever

This means there is a record low orderbook and for the first time ever, this fleet is projected to decrease in size.

The Braemar J19 index’s one-month forward curve has rates at about $15,200 per day by 2030, compared to actual earnings of about $13,000 in January.

With newbuilding prices up to $38m, Cooke believes the price to earnings ratio means there is unlikely to be a large influx of newbuilding orders in the near future.

“This lack of orders looks set to coincide with a large number of ships reaching their max market age. If this is the case, strong earning increases beyond 2024 are predicted,” he added.

J19s are the deepsea chemical shipping. Braemar’s partner, Singapore operator Womar, has about 20 ships in the J19 class.