Odfjell’s business model, with its global, integrated platform and large, flexible fleet, distinguishes us from our competitors. Our vessels are mainly equipped with stainless steel tanks that can carry “anything liquid”, from vegetable oils used in our meals to hazardous and toxic chemicals, vital for agricultural production.
This flexibility gives us the opportunity to adapt to rapidly changing market conditions across the different products we carry, and it gives us access to a wide range of products that allow for valuable diversification of our income. As history shows, this business model makes Odfjell's earnings less cyclical than those of our competitors within the broader tanker segment.
The fundamental outlook for the chemical tanker market is solid, both in the short and long-term. In the short-term, fleet growth is projected to be minimal, driven by a low orderbook, an aging fleet, and a lack of new orders due to high newbuild prices and uncertainty regarding fuel in the near future. Swing tonnage from product tankers is currently expected to remain low, as these vessels generate better yield in the CPP trades under current conditions.
Demand for shipping capacity is driven by two variables; the volume of product to be shipped, and the distance it needs to be transported.
Demand is expected to grow in the longer term, especially considering the growth potential in the developed world, where per capita chemical demand is still low. We expect sustainable and healthy tonne-mile demand for the foreseeable future.
Odfjell is fundamentally exposed to the same market fluctuations as those affecting crude and product tankers. However, the industrial nature of our segment sets us apart. Our core vessels are sophisticated, with a great number of stainless steel tanks, equipped to serve complex trades and carry a wide range of contracted high-margin products.