Odfjell expects softer chemical tankers market in Q1, volumes to tick higher

Odfjell SE (Bergen, Norway) said it anticipates the global chemical tanker market to soften slightly in the first quarter, extending a trend seen in the final quarter of 2024 but that conditions will remain stable despite a “volatile” geopolitical and macroeconomic environment, as per Chemweek.

The company, which posted its highest ever annual net profit of $278 million in 2024, said Feb. 6 in its guidance for the first quarter of 2025 that a reduction in swing tonnage “should lead to improved volumes and earnings in the chemical tanker trades,” but that the effect is anticipated to be seen only towards the tail end of the quarter. The quarter is expected to produce solid financial results, but slightly weaker sequentially “due to the lower spot volumes observed at the start of the quarter,” said Odfjell CEO Harald Fotland.

In a market outlook given within its financial results, Odfjell said that although it saw a slight reduction in chemical tanker demand in the fourth quarter of 2024, most crude oil tankers had exited the clean petroleum products (CPP) segment by early 2025. This should support the CPP market and “may gradually lead to reduced swing tonnage and an improvement in volumes and rates.”

Odfjell noted that total seaborne volumes of chemicals and vegetable oils saw a “modest increase” in 2024 compared to the previous year and are expected to grow by a further 2-3% in 2025.

“Geopolitical and macroeconomic conditions remain volatile. Policy shifts in the US, including potential import tariffs on several countries, may influence trade flows. Plans to increase the Strategic Petroleum Reserves (SPR) could have implications for global trade and energy markets,” it said.

Although the ceasefire agreement in Gaza represented a “step towards stability” and could mean less Red Sea disruptions over time, Odfjell said commercial shipping through the region is likely to recover only gradually. “Overall, the short-term outlook remains uncertain,” it said.

In a presentation slide given as part of its financial results, Odfjell said the market outlook could see “potential short term positive effects on deep-sea tanker segments due to inefficiencies and emergence of new trade flows.”

Freight rates stable in Q4
For the fourth quarter, Odfjell posted net earnings of $50.5 million on sales of $295.8 million, with the net profit down slightly year over year but falling more substantially sequentially, from $71.3 million. The sales figure was also slightly lower compared to the prior-year quarter and down $21 million from the third quarter.

Vessel time charter earnings (TCE) of $183.1 million declined sequentially in the fourth quarter from $202.1 million but were slightly higher year over year. Freight rates were stable, but lower spot volumes led to the fall in sales and TCE, it said. Odfjell’s fourth quarter daily TCE rate was $30,744, falling from $33,906 in the previous quarter and $31,079 a year earlier, but elevated rates throughout last year saw the 2024 TCE rate hit a company high of $33,531. The rate peaked in the second quarter of last year at $36,493 per day.

Net profit at Odfjell Terminals was $2.2 million, slightly lower sequentially, with the segment’s average commercial occupancy rate of 95.2% in line with the previous quarter. Odfjell said it expects a “modest uplift” in occupancy in the first quarter.

“Though still below the peak activity levels of 2021 and 2022, throughput volumes at the terminals have increased in recent months, and the near and medium-term outlook remains positive,” it said.

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The America Chemistry Council (ACC) has announced that its board of directors has approved two new members: Olin Corp. as a manufacturing member and Stolt-Nielsen Ltd. as affiliate member, as per Chemweek.

“I’m thrilled to have Olin back at ACC, especially as a leader and practitioner of Responsible Care, which is mandatory for all manufacturing members,” said ACC president and CEO Chris Jahn. “I look forward to the value that Stolt-Nielsen will bring to our ACC and members through its experience in the ever-critical fields of chemical transportation and storage.”

Olin — a leading producer of chlor-alkali, vinyls, epoxy and ammunition — posted fourth-quarter net income of $11 million, down 80% year over year, with sales totaling $1.67 billion, up 3.5% year over year.

Stolt-Nielsen was approved as an affiliate member. It provides global transportation, storage and distribution services for chemicals and other bulk liquids.

Stolt-Nielsen posted a net profit of $91.4 million for the fourth quarter on sales of $709.4 million, with earnings down year over year from $98.4 million. Sales improved, however, from $695.2 million in the year-earlier quarter. Stolt-Nielsen’s fourth quarter and full financial year ended on Nov. 30, 2024.

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Honeywell International Inc. (Charlotte, North Carolina) reported fourth-quarter earnings in its energy and sustainable solutions (ESS) segment of $431 million, down 3% year over year from $444 million, on sales of $1.733 billion, up 4%, as per Chemweek.

Organic sales, which exclude the impact of currency effects and acquisitions, increased 1% year over year. UOP, the company’s catalysts and process technologies business, led the segment at 3% sales growth, which Honeywell attributed to robust gas processing solutions and equipment demand. The advanced materials business saw sales decline 1% organically as “macro-related headwinds in fluorine products were partially offset by continued strength in [the] specialty chemicals and materials business,” said the company.

The segment margin came to 24.9%, down from 26.7% in the year-ago quarter owing to cost inflation and volume deleveraging in advanced materials, the company said. Catalyst sales, which tend to be “lumpy,” were a major driver in the margin shrinkage, said Mike Stepniak, vice president/corporate finance, during the company’s earnings call. “And that will actually reverse itself in the second half,” he added.

Orders grew 19% year over year, the third consecutive quarter of double-digit orders growth, noted Honeywell.

Honeywell expects segment sales growth in the low single-digit range during 2025, said Stepniak. “Margin will expand as improved volume leverage and meaningful accretion from the LNG acquisition offsets inflation,” he added, referring to Honeywell’s acquisition of Air Products liquefied natural gas (LNG) process technology and equipment business last year.

“In the first quarter, we expect sales to be down low single digits as we work through challenging comps in fluorine products,” Stepniak continued. “However, we expect solid growth in UOP supported by strength in equipment projects as well as conversion of our robust backlog in [safety and productivity solutions].”

Honeywell in October 2024 announced plans to spin off the advanced materials business to shareholders as an independent company.

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The European Commission has proposed provisional antidumping duties on epoxy resin imports from China, Taiwan and Thailand, according to an official summary. No duties were proposed for South Korean producers, as per Chemweek.

The decision stems from an investigation launched on July 1 after European producers lodged a complaint that Asian exporters -- particularly from China, South Korea, Taiwan and Thailand -- were selling epoxy resin at excessively low prices, undercutting European manufacturers.

The investigation found that South Korean producers were not engaged in dumping.

The proposed duties for producers in China are 24.2%–40.8%; in Thailand, 32.1%; and in Taiwan, 10.8%–11%.

Market participants are still weighing the impact of the EU’s move. “We are gathering feedback on the market response to this news,” a South Korean producer said. “It is certainly positive for us in the European market.”

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Yara International ASA has shut down ammonia production at its plant in Hull, UK, a source with the fertilizer producer confirmed to S&P Global Commodity Insights on Feb. 7, as per company.

The source said the shutdown, which started at the end of January, was expected to be permanent. The Hull plant had a production capacity of 300,000 metric tons per year and started production in 1989, according to data from Yara and Commodity Insights analysts.

The source said the ammonia produced at the site was not used domestically, with all its output exported. The closure is a major component of Yara’s plan to close 1 million metric tons per year (MMt/y) of ammonia production across its European plants, detailed by the company’s president and CEO Svein Tore Holsether during Yara’s fourth-quarter 2024 earnings presentation on Feb. 7.

The figure represents just over 20% of the company’s existing European output capacity of 4.7 MMt/y and would double Yara’s future net ammonia import position in Europe to 2.2 MMt/y from its current net requirement of roughly 1 MMt/y, according to the presentation. The firm’s urea production in Europe requires 2 MMt/y of integrated ammonia production that “cannot switch to imports,” the presentation said.

Yara is mothballing the Hull plant, according to the presentation. The company is seeking to increase its imports into Europe from locations with lower production costs due to Europe’s higher gas costs, which have dented the competitiveness of the company’s European plants, according to Holsether.

Yara sees a “significant ammonia offtake and margin improvement opportunity in Europe,” according to the Feb. 7 presentation. Another 400,000 metric tons of the 1 MMt/y reduction in ammonia production capacity is expected to come offline with the previously announced transition of the Tertre plant in Belgium, it stated.

The final 300,000 metric tons per year reduction is expected to come from “optimization of excess capacity” at other industrial plants, it said, although details of specific impacts at its various plants were not given.

Yara announced Feb. 7 a net loss of $290 million for the fourth quarter of 2024 and signalled expectations for higher feedstock gas costs in the first half of 2025. Yara is the world’s second largest producer of ammonia, according to the company.
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