As a result of margin pressure from new supply coming onstream over the last few years add economic uncertainty after the pandemic, limited new investment in export-oriented chemicals capacity is expected through to 2022, the Norwegian chemicals logistics and transport major Odfjell said.
Strong shipping sector capacity demand had been contributed by significant new capacity investments in the Middle East and the US. However, as players deal with margin pressure on the back of that supply growth, investment appetite has been dampened by depressed economic growth in 2019.
Particularly around the global construction and automotive sectors, the company at present sees a negative impact on 28 percent of seaborne trade from slower demand on the back of the crisis. Due to demand from the food and agriculture, packaging and pharmaceutical sectors, around half of chemicals products currently have neutral to positive effects.
The company is expecting its financial in Q2 to be stronger than the previous quarter. A net loss of $4.5 million for Q1 of the year posted by the company, representing its strongest quarter in several years.
Weak global economic growth in the run-up to the pandemic meant that new ship supply is expected to be much lower than at the time of the financial crisis, at around 1.4 percent this year and 0.5 percent next year, compared to 14-15 percent in 2008-2009.
