Eastern Pacific Shipping has cancelled the sale of a car carrier and turned to the charter market for a fat profit as rates surge.
Shipping sources following the segment said the Singapore owner has fixed out the midsize pure car/truck carrier for three years at a rate of $75,000 a day, or a total of about $82.1m.
One Asia-based car carrier executive said the charterer should have acquired the Xiamen-built, 4,902-ceu Lake Kivu (built 2006), as its current market value is about $30m less. Valuation platform VesselsValue puts a $54.56m price tag on the ship.
A Spanish multi-modal transport company, Suardiaz Group, was named by sources as the charterer.
Eastern Pacific officials declined to confirm the charterer’s identity or details of the deal, citing contract confidentiality.
The Asia-based executive said: “This demonstrates how hot the car carrier charter market is now.
“We think Suardiaz has the backing from an original equipment manufacturer and has the cargoes to transport. Otherwise, no car carrier operator would be willing to pay such a high rate. This shows automakers are desperate for vessels to ship out their vehicles.”
Shipping sources told TradeWinds that Eastern Pacific had been planning to sell the Lake Kivu under a fleet renewal programme; it had been put up for sale in September and attracted several potential buyers.
The sources said companies had offered more than $60m. However, Eastern Pacific changed its mind when charter rates for the ship type continued to soar.
The Lake Kivu is believed to be the second lucrative car carrier charter deal for Eastern Pacific in the past four months.
Surge in demand
In August, it fixed out its 6,178-ceu Lake Geneva (built 2015) for a year at more than $100,000 per day — a record at the time — to Japan’s Nissan Motor Car Carrier.
The charter market for car carriers is showing no sign of slowing down as the sector experiences a shortage of tonnage after years of underinvestment and a surge in global demand for electric vehicles.
Companies started to invest in newbuildings last year. Clarksons’ Shipping Intelligence Network shows nearly 90 pure car carriers are on order, representing 16% of the trading fleet.
Eastern Pacific is one of those investing in new car carrier tonnage. It has a dozen LNG dual-fuel, 7,000-ceu newbuildings being built in China — six each at China Merchants Jinling Shipyard and China Merchants Weihai Shipyard. They are due to be delivered between 2023 and 2025.
