Hoegh Autoliners chief executive Andreas Enger believes car carrier rates will come down.
The sector has been red hot in recent years, with rates for a 6,500-ceu vessel rallying from just $10,000 per day in August 2020 to $110,000 per day in December 2022, with rates staying in the six-figure range since, thanks to a boom in Chinese exports and low capacity.
But speaking to Bloomberg, Enger said those rates would eventually be halved thanks to tariffs and newbuilding deliveries.
“The car carrier industry has enjoyed exceptionally good times for a couple of years actually and we still are,” Enger told the newswire.
“It’s fair to say that our profit level is exceptional. But it’s also at a level that you can’t expect it to remain forever.”
European Union tariffs on Chinese-built electric vehicles — exactly the vehicles that supercharged the car carrier rate rally — have been discussed in Brussels for nearly a year.
Early on, industry figures thought the proposal was a non-starter driven by labour and countries whose automakers were not building in China.
But the idea picked up steam, with the EU taking customs registrations on the Chinese-built cars and last month holding a secret, advisory vote on the measures.
Twelve supported the measures, which would see a 17.4% charge on BYD Auto vehicles, 19.9% on Geely and the maximum 37.6% on SAIC, while four voted against.
Eleven abstained, suggesting the measure could fail in a final vote in November.
So far 20 vessels have been delivered this year, including the first of Hoegh Autoliners’ Aurora-class dual-fuelled vessels, with another 27 still on the way, according to data from Clarksons.
The shipbroker said 66 were due for delivery next year and 65 in 2026, with many of them expected to be sopped up by Chinese exports.
Even if rates fall to the $50,000 per day range, vessel owners will still be recording strong rates. The closest large car carriers came to that mark was in 2007, when they averaged $44,375 per day.
