The long-awaited recovery for chemical freight rates might only be seen in 2016 at the earliest.

Despite shipowners hoping for a sustained recovery since 2010, the near-term fundamentals are not in favour of the sector, according to Italian shipbroker Banchero Costa.

Despite hopes for a turnaround, 2014 was another difficult year for the chemical tanker sector, even though earnings and asset values did marginally improve from a year earlier.

"The low oil and gas prices and high volumes of production are expected to affect the petrochemical industry positively, and in particular encourage cheap exports of feedstock chemicals from the United States to Asia. There could also be positive spillover effects from the currently strong product tanker sector." Banchero Costa said.

Low oil prices also provide operational savings because of the reduced bunker prices. In addition, vegetable oil trades have experienced strong growth in recent years, and demand will be sustained by rising living standards in developing countries.

There are about 2,700 chemical tankers totalling 34.9 million dwt in the in-service fleet. The size of the tankers range from 1,000-40,000dwt. About 40% of the fleet has stainless steel tanks.

Banchero Costa noted, "The chemical tanker sector still suffers from oversupply, following excessive ordering in the mid-2000s."

The chemical tanker fleet reached its apex in 2008, when newbuilding deliveries amounted to over 310 units (6 million dwt), resulting in a net fleet growth of 13% year on year.

Deliveries have been dropping ever since, reaching a low of 54 vessels for 670,000dwt in 2014 - resulting in a net fleet growth of only 1% from 2013. Demolition achieved a near record year in 2013. But last year, there was a slow down with only 23 vessels reportedly scrapped.

The total orderbook now amounts to about 246 units (5.5 million dwt). This is equivalent to 9.1% of the current trading fleet in terms of number of ships and 15.6% in terms of total dwt.

For 2015, 127 vessels are on order (2.4 million dwt) - this would result in the fleet expanding by 6% if all the units on order are delivered on time.

Due to charterers' preference, 148 of the chemical vessels in the orderbook have stainless steel tanks, of which 88 are in the range of 16,000-25,000dwt and 34 are of 30,000-40,000dwt. Only 60 chemical tankers on order have epoxy-coated and 34 marineline-coated tanks.