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Ethylene Semi-Ref

While Iranian exports were healthy through May, they were almost entirely halted by the sanctions enforced in June. Their exports remained limited until fourth quarter when several vintage ethylene carriers were purchased by interests unbound by sanctions and subsequently used for the Iranian export trade.

Ethylene exports from Qatar were expected to decline after a new downstream processing plant was meant to come online, but delays in construction led to Qatari exports exceeding expectations through the third quarter. Driven further by spot cargoes from Ruwais, UAE, and Rabigh, Saudi Arabia, the ethylene carriers experienced a strong summer. As Qatar’s delayed downstream production facility came online, the market briefly experienced the equilibrium expected earlier in the year. However, a combination of plant maintenance and technical problems in the fourth quarter at downstream processing plants in Saudi Arabia led to increased exports from Jubail, Saudi Arabia and a fairly tight vessel market at the end of the year.  

Looking at the market west of Suez, there was less trans-Atlantic business for CC4 and butadiene generated than anticipated. However, there were several shorter periods of positive arbitrage from Europe to Asia for propylene, CC4, and butadiene, all of which led to positive contributions to the ton-mile balance.

For the larger semi-ref vessels, a strong year for all market participants was capped with Navigator Gas’ consolidation of its handy sized fleet through the acquisition of AP Møller’s 11 vessels.

During 2012, orders for vessels ranging from 8-22,500 cbm included five semi-ref and 12 ethylene vessels. The semi-ref fleet received three new vessels this year, while there were no new ethylene vessels delivered. One ethylene carrier was scrapped.