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ME Gulf eastbound freights to jump in 1H 2020

27 December 2019

Long haul freights to gain 22% next year due to IMO2020

ME Gulf/NE Asia freights jumped in 4Q this year on the back of tightening space. Eastport Research & Strategy is forecasting long haul freights to climb 22% in 2020 due to higher fuel costs as a result of the switch to low sulphur fuel oil. Methanol and mono ethylene glycol (MEG) accounted for 74% of overall chemical cargos in the ME Gulf eastbound trade lane in 2018 and any changes in demand for these chemical are likely to affect freights. MEG shipments may be at risk as China moves to self-sufficiency and there seem to be an excess global supply of the chemical over the next two years. Methanol cargos to the Asian mainland may inch up with increasing methanol-to-olefin plant capacities. Space on MRs may tighten going forward as demand to ship refined products may strengthen with the looming IMO2020 deadline. Against a backdrop of ongoing global recovery, cargo demand may rise and freights could be supported. Please refer to Asian Chemical Shipping Annual Review and Outlook for 2020 – A New Era for more freight forecasts in other trade lanes.

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