Company: ASC
Filing Date: 2025-03-07
Form Type: 20-F
Source: 0001558370-25-002500
Chunk: 73

Company: Ardmore Shipping Corp
Filing Date: 2025-03-07
Form: 20-F
Item: Item 4
Chunk 73
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 trades to take advantage of higher earnings in the CPP market. The market was facing challenges in 2021 as ongoing contraction in production and consumption of chemicals due to COVID-19 led to a slowdown in the shipping market for chemicals/vegetable oils. In 2020, global seaborne chemical trade fell 3.6%, due to weak demand on account of the COVID-19 pandemic; however, TCE rates increased by 4.6% as many vessels shifted to trade in the product tanker market which limited the availability of vessels operating in the chemical tanker market.

Chemical Tanker Asset Values

As in other shipping sectors, chemical tanker sale and purchase values also show a relationship with the charter market and newbuilding prices. Newbuilding prices are influenced by shipyard capacity and increased steel prices; second-hand vessel values may vary because of the country of construction and the level of outfitting of such vessels. Although there has been a relatively high level of activity in recent years, chemical vessels can be difficult to market to buyers due to the complexity of operations in the chemical market and they may not always achieve their initial newbuilding premium. Newbuilding price trends in the chemical tanker sector are more difficult to track than product tankers due to the lower volume of ordering and variation in specification.

Newbuilding prices increased in 2022 due to high material costs, labor shortages, global inflationary pressures, and limited shipyards slots. Newbuilding prices increased further in 2023 despite softening steel prices due to global inflationary pressures. Second-hand prices strengthened due to limited tonnage availability and high freight rates. In 2023, prices were higher than the average prices over the past ten years for both newbuilding and secondhand vessels.

Table of Contents

Newbuilding prices have been rising since January 2024 due to factors like inflation, limited yard capacity amid high demand and rising labor costs. Second-hand values remained firm throughout the year, the historically low deliveries this year contributed to the high demand for second-hand tonnage, in turn raising their values.

Chemical Tankers: Freight Rate and Asset Value Summary

                           TCE      Newbuilding Price                     Secondhand Price (1)                 
                    U. S.$/Day        (U. S.$million)                          (U. S.$million)                 
 ───────────────────────────────────────────────────────────────────────────────────────────────────────────────
  Year               35-37,000              22-24,000      35-37,000                 22-24,000