The Future of Asia’s Leading Transhipment Hubs
07.08.2019 - NEWS

July 8, 2019 [Ener8] – Today both Singapore and Ulsan are the main Asian transhipment hubs in the liquid bulk and chemical industry. This is part 2 of our article “The Role Of Singapore & Ulsan In The Liquid Bulk Chemical Sector“.

 
We focus on the main chemical tanker shipping trade lanes and the trends to watch. Read previous article: The Role Of Singapore and Ulsan In The Liquid Bulk Chemical Sector.
 

Chemical tanker shipping trade lanes

The largest volume to North East Asia ships from the Middle East with Saudi Arabia being one of China’s main trading partners. The total shipping volume from the Middle East to North East Asia in 2018 was around 17 million tonnes. Other leading suppliers to North East Asia are South East Asia and America.
 
A large portion is delivered directly to China with a decent volume shipped via Ulsan port. Chemicals shipped to Ulsan are either delivered to customers, discharged in tank terminals for distribution at a later stage, or transferred directly from larger mother vessels into smaller tankers for immediate regional distribution.
 
The Intra North East Asia trade lane is the largest trade lane in the world with a total annual volume in 2018 close to 26 million tonnes. The majority of this volume is destined for China with Korea being the biggest exporter. South East Asia is mostly supplied from North East Asia, Europe, and the Middle East.
 

Trends to watch for Asia’s leading transhipment hubs

Twelve of the top 30 largest chemical producers are Asian, bringing about 56 percent of global chemical sales, with China becoming the new leader in both the global petroleum and chemical industry. While China continues to dominate the world ranking in chemical sales, its production capacity has been growing at an average annual rate of more than 10 percent in recent years. It’s clear that China is no longer the underdeveloped manufacturing country it once was and is today focusing on building up its logistics capabilities while it takes over the supply chain.
 
As China is often the final destination of raw materials, it may develop different hubs located in the North, East, and South of the country. This will over time take away business from tank terminals situated in Singapore and Ulsan. The service level in China will gradually evolve, providing better opportunities for financial services, trading, logistics, and bunkering. Another factor is China’s growing chemical tanker fleet and importance in the maritime industry which will help drive the development of tank terminal hubs in China.

Singapore plays a crucial role in South East Asia as one of the world’s leading transhipment hubs. Malaysia and Indonesia are expected to vastly increase their capacities in the near future, both potentially approaching Singapore in terms of total storage capacity.
 
The increasing tank capacities in the greater Singapore area may imply greater competition among market players when demand for storage grows at a slower pace. If Malaysian ports develop to their full capacity to handle both tankers and container vessels, fewer ships will call Singapore. Malaysia will continue to challenge Singapore’s status with the help of China’s New Silk Road projects. While Singapore cannot commit more land to new commercial storage developments, Indonesia is also stepping up its infrastructure investments to serve oil, chemical and trading companies.
 
As China is now an important player in the industry and is developing its service capabilities, it still faces several challenges such as restrictions on ship-to-ship transfers in ports, and the requirement to use Chinese flag vessels for domestic distribution. Until China overcomes these challenges, Ulsan will continue to play an important role in North East Asia. Building on a strong network of oil refineries, petrochemical plants, traders and a large shipping community, Singapore’s leading position as a regional shipping, bunkering and storage hub in South East Asia also remains robust for now.

 
————-
 
Click Here to Access Today a 4,900 Tank Terminal Database With a Pro Trial