July 2026 Monthly Chemical & Tanker Report

The US Gulf chemical tanker market remained generally subdued throughout July with vessel availability continuing to outpace cargo demand across most major trade lanes. Seasonal slowdowns, escalating tension in the Strait of Hormuz, and cautious chartering activity contributed to soft market conditions whilst prompt tonnage availability placed downward pressure on freight rates. Although contract volumes remained relatively stable, owners continued to face challenges filling open space resulting in greater rate flexibility and heightened competition for available cargoes. 

The USG/Northwest Europe market remained subdued throughout most of July with limited spot activity as seasonal slowdowns and broader market uncertainty, including renewed tension following the collapse of the Middle East ceasefire, encouraged a cautious wait-and-see approach. Prompt vessel availability persisted leading owners to seek completion cargoes and smaller specialty parcels whilst showing greater flexibility in freight discussions, placing modest downward pressure on rates despite limited fixing activity. It has been suggested that some business was concluded off-market indicating underlying demand may be stronger than visible spot activity suggests. Meanwhile, contract business remained relatively stable with healthy COA nominations reported for early August.

The USG/West Coast India market softened steadily through July, with rates easing across all parcel sizes each week as ample part-cargo space, spread across as many as three vessels straddling July and August dates, sat largely uncovered. Inquiry remained on the quiet side throughout the month, with MEG, EDC, and glycols cargoes circulating regularly, though much of that interest reflected traders working toward cargo sales rather than committed stems, limiting how much of it converted into confirmed fixtures. The market was also operating against a serious escalation in the Strait of Hormuz, where US strikes on Iranian targets, an attack on a Qatari LNG tanker, and a sharp drop in Strait traffic culminated in the IRGC announcing closure of the Strait until further notice on July 11. Against that backdrop, Indian buyers continued to source glycols and easy chemicals from the US Gulf at a consistent pace, but that inquiry did not translate into fixing activity frequent enough to support a rate recovery. Confirmed activity through the month included glycols parcels moving in the 90s per metric ton range and an easy chemicals fixture for second-half August, alongside owners showing greater willingness to negotiate on larger 20,000-ton requirements as firm fixing momentum stayed limited. With the Strait situation unresolved at month-end, the corridor is expected to remain range-bound with a soft bias into August.

The USG/Far East Asia market saw mixed conditions throughout July with stronger demand for larger parcel business helping absorb available space and providing modest support to freight rates, particularly as improvements in the MR market and continued strength in the CPP market continued. Larger stems of commodity cargoes, including monoethylene glycol, ethylene dichloride, and ethanol, remained the main driver on this route. In contrast, smaller parcel rates softened as concentrated July fixing left limited prompt cargo inquiry in its wake, prompting owners to offer more competitive pricing with only marginal success. Looking ahead, sentiment remains cautious, with the more consequential forward variable being the potential re-entry of tonnage previously constrained by Arabian Gulf conditions into the Atlantic and Pacific markets. Charterers with uncovered August requirements should treat the current window as an opportunity to engage before that supply picture develops.

The USG/East Coast South America market remained soft through July though activity improved modestly as the month progressed. Early demand was limited and centred on products such as lubricants, chemicals, paraxylene, acrylonitrile, and styrene monomer. Activity increased later in the month, with various chemical cargoes circulated for late-July and August loading, though confirmed fixtures remained limited relative to the volume of inquiry. Prompt and forward vessel availability remained plentiful throughout, indicating vessel supply continued to exceed demand. As a result, freight rates softened slightly early in the month before stabilizing, and the market failed to gain meaningful support from the increase in business.

The USG/Mediterranean market continued to soften through July as ample vessel availability, abundant part-cargo space, and owners' ability to secure cargoes out of the Mediterranean kept supply comfortably ahead of demand. While overall cargo activity remained relatively steady, with continued interest in glycols, caustic soda, MEG, alpha olefins, and acetic acid, excess tonnage continued to pressure freight rates, particularly for prompt shipments, where owners were often willing to accept discounted levels to complete vessel positions. A widening gap emerged between prompt and forward business with near-term cargoes fixing at lower rates than forward nominations as owners prioritized utilization. Renewable fuel and biofuel movements from the Mediterranean also continued to attract additional tonnage into the region, further increasing competition on the route. Improving CPP tanker markets and higher bunker costs could provide future rate support, although current market fundamentals remain largely in charterers' favor, and freight levels are expected to stay under pressure until vessel supply and cargo demand become more balanced.

Strait of Hormuz: No Resolution in Sight

It has now been more than 5 months since the US and Israel attacked Iran under their offensive Operation Epic Fury and a resolution to the conflict appears no nearer. The interpretation of several terms of June's "Islamabad Memorandum of Understanding" remain contested by both sides and with specific regards to the Strait of Hormuz, it opened as agreed for a number of days allowing many vessels to exit the MEG before Iran attacked several vessels utilising the Oman corridor resulting in traffic coming to a near standstill yet again.

Fleet development activity picked up in July, with new orders spanning MR and stainless steel chemical tankers from owners including Asyad Shipping, Yangzijiang Maritime, MAC Shipping, E&S Tankers, and Fairfield Maritime Japan, alongside Lila Global's purchase of four Womar pool stainless steel tankers and one confirmed recycling sale. Deliveries from this month's contracting are concentrated in 2028 and 2029, adding to forward supply rather than near-term availability, while the orderbook for smaller stainless steel and MR1 tonnage remains modest relative to an ageing in-service fleet. Combined with a fleet running 8.1% ahead of last year and next-year growth projected at 4.8%, July's activity points to continued expansion concentrated in mid-size chemical and product tonnage over the next several years. 

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