A midsize secondhand car carrier is changing hands at a price that confirms the red-hot state of the market.
Industry sources and London brokers concur that a $50m deal has been concluded for the Chinese-built, 4,902-ceu Lake Superior (built 2007).
Eastern Pacific Shipping is selling it to Israel’s XT Group.
The deal carries some characteristics of an internal transaction. Tycoon Idan Ofer, who controls Eastern Pacific, is a major shareholder in the XT Group.
An industry source said the transaction makes sense for the XT Group, which already has a long-term charter lined up for the Lake Superior.
After several years of slumping earnings, capped by the pandemic, car carriers have bounced back spectacularly, thanks to a post-Covid recovery of global vehicle sales and port congestion.
In July, Eastern Pacific fixed out a seven-year-old panamax pure car/truck carrier at an unprecedented rate of more than $100,000 per day as demand for the ship type outstripped supply.
Second car carrier
Such lucrative conditions have probably prompted the XT Group to increase its hitherto modest presence in the market.
The company is currently listed with one car carrier in its diversified fleet of more than 40 vessels, which consists mostly of container ships and chemical carriers.
Other established companies have already been on an expansion path. Greece’s Neptune Lines has grown its fleet by one-third over the past year, as TradeWinds reported.
The market has even seen newcomers entering, such as Greek tanker owner Atlas Maritime, which has ordered two ships so far.
Eastern Pacific may be working on another car carrier deal to benefit from rising prices.
The industry source said it could also line up for sale a sistership to the Lake Superior. However, the 4,902-ceu Lake Kivu (built 2006) would be divested only “if the price is right”.
Eastern Pacific’s car carrier sales do not mean it is about to shrink its exposure to the market.
By contrast, they should be seen as part of a fleet-renewal strategy under which the company ordered 12 LNG dual-fuelled PCTC newbuildings at shipyards in China.
Eastern Pacific was one of the first owners to invest in LNG dual-fuel ships, when others were hesitating — not just in car carriers but also in bulkers, tankers and container ships.
The company recently took delivery of its second LNG dual-fuelled suezmax, the 158,000-dwt Starway (built 2022), on which it completed its 50th LNG bunkering operation.
“Bunkering LNG for a spot vessel such as the Starway, among volatile LNG prices, shows Eastern Pacific’s commitment to decarbonisation and the industry’s energy transition,” one source said.
