The red-hot car carrier (PCTC) market, where daily rates have been in six-digit territory for months on end, is set to grow in size by around 40% in the coming few years, according to AXSRoRo, a free new monthly title from the same publishers of Alphaliner, one of the main reference points for container shipping.
“Claiming that the PCTC market remains buoyant is an understatement when the newbuilding orderbook has reached an all-time high,” AXS RoRo stated in its opening article.
Clarksons data shows that the current PCTC fleet to orderbook stands at 35% today. Only LNG – at a record 55% – has a higher ratio.
Clarksons data shows that one-year time charters for 6,500 ceu ships are in the $105,000 range with car carriers having been one of the most profitable sectors in shipping in the 2020s. For reference, the previous high for this shipping segment was reached in 2008 with rates just over $50,000 a day.
Close to 40 firm car carriers have been contracted year-to-date, according to Clarksons data including a slew of the largest ever contracted, while last year saw 88 units firmed up mostly across Chinese shipyards and predominantly larger vessels.
Besides the usual suspects ordering tonnage, AXS RoRo pointed out new players-cum-tonnage providers such as Seaspan Corporation and H-Line Shipping as well as Greece’s Atlas Maritime whose first PCTC, the 7,000 ceu capacity Electric Star, is expected to be delivered in October.
Global liners such as HMM and CMA CGM have also entered the sector, as have Chinese automotive brands while MSC’s $700m bid for Oslo-listed Gram Car Carriers (GCC) is expected to close in the coming few days.
One of the main reasons for the surging rates has been the changing trade patterns with cars being shipped far greater distances. This has largely been driven by surging long-haul Chinese exports particularly to Europe, and increasingly of larger, heavier electric vehicles. The situation has been exacerbated by the Red Sea shipping crisis which has seen car carriers take the much longer way to Europe via the Cape of Good Hope.
Chinese electric vehicle exports have become a hot topic for politicians in the West with both the US and the European Union looking at tariffs this year.
