#383: “Is the Bulk Carrier Market Stable? Strong Yet Lingering Concerns”
“I want to keep owning car carriers in the future. However, considering the tariff issues in Europe and the plateauing demand for EVs (electric vehicles), we can’t confidently say this segment is secure in the long term.”
(Text by Hirofumi Yamamoto)
■ EV Slowdown
This sentiment was expressed by a shipowner at a study group for shipowners held in western Japan. During a networking session, they shared concerns about the future development of the car carrier business.
At present, the car carrier business is thriving. The supply-demand balance for car carriers was disrupted even before the COVID-19 pandemic in 2020, halting orders for new vessels.
Car carriers are highly specialized vessels designed exclusively for transporting finished vehicles. Globally, only 800 such ships are currently in operation.
As a result, the car carrier business has historically been heavily influenced by vehicle trade flows, particularly exports from Japan and Asia to the U.S. and Europe.
An executive from a major shipping company elaborated:
“There was a time when 6 million cars were exported annually from Japan. Back then, even reefer container ships were used to meet demand. New vessels ordered during that period would only be completed three years later. By the time those ships were ready, Japan’s annual vehicle export volume had dropped to 4 million, forcing us to significantly downsize our fleet.”
A current concern is the European Union’s (EU) decision to impose additional tariffs on Chinese-made EVs starting in November. This adds to the challenges faced by car carriers already taking longer routes due to the Suez Canal congestion. The uncertainty surrounding China’s EV exports looms large.
Over the next five years, the EU plans to raise tariffs on Chinese EVs from the existing 10% by an additional 7.8–35.3%, reaching up to 45.3%. While Germany, with its heavy reliance on China for its automotive industry, supported the move, France opposed it.
Another Japanese shipowner remarked:
“Currently, there are 212 new car carriers on order globally, compared to the 800 vessels already in operation. The added transport capacity accounts for 35% of the existing fleet. While poor EV sales might lead to more hybrid vehicles being transported, it’s not that simple. Most car carriers are under long-term charter agreements with operators, but the specialized management they require makes me question whether to keep owning them in the future.”
Major European operators have been ordering ultra-large LNG-powered car carriers with capacities of 9,000–10,000 vehicles from Chinese shipyards, with some already delivered. However, these orders did not account for the current decline in EV demand. It is unclear where the surplus Chinese-made EVs will head next, though Europe and the U.S. seem unlikely destinations.
■ The 10% Newbuild Constraint
A Greek shipowner attending a Japanese conference spoke confidently:
“The bulk carrier market will remain strong next year. The current order book for new vessels accounts for only 10% of the existing fleet’s capacity. This level of supply pressure is manageable.”
Will the bulk carrier market indeed remain robust as forecasted? Is there no room for dissenting opinions?
Signs of change in the bulk carrier market are already emerging.
Since mid-November, the Panamax market has hovered around $8,000 per day, well below the breakeven point of $12,000. Meanwhile, the Capesize and Handy markets have managed to stay above their respective breakeven points of $20,000 and $12,000.
But can these levels be maintained next year?
A shipping broker commented:
“If you only compare the current fleet with the order book, it’s true that newbuild orders are low. Chinese shipyards are focusing on high-value vessels like large container ships and LNG carriers. However, look at the prices for newbuilds. According to UK-based Clarkson Research, the price of a new Capesize vessel as of November is $76 million, up more than $10 million from $60.5 million in 2021. To break even with these ship prices, daily charter rates would need to reach around $30,000.”
Signs of overcapacity at Chinese shipyards are already evident in the LNG carrier market. Demand for LNG carriers surged globally due to rising natural gas demand and reduced Russian gas exports to Europe.
For LNG carriers with tank capacities of 150,000–180,000 cubic meters, the order book stands at 295 vessels compared to the 439 currently in operation, with the additional capacity representing 69% of the existing fleet. However, spot charter rates for LNG carriers have plummeted to around $20,000 per day, far below the breakeven point of $80,000–90,000.
An energy analyst observed:
“Economic sanctions imposed by the U.S. on Gazprombank, the financial arm of Russia’s state-owned Gazprom, are now in effect. Over the past three years, geopolitical risks have benefited shipping. But moving forward, which way the winds will blow remains uncertain. The biggest factor is undoubtedly the capacity trends at Chinese shipyards.”*
(Domestic Shipowner Reporting Team)
国内船主の今】
第383回「バルカー市況は安泰か。堅調も忍び寄る不安」
「これからも自動車船は保有したい。しかし、欧州の関税問題やEV（電気自動車）需要の頭打ち感を見ると、将来的にこの船種が安泰とも言っていられない」
■EVの失速
西日本で開催された船主勉強会。懇親会の席で自動車船を保有する船主が今後の事業展開について懸念を示した。
足元の自動車船事業は好調だ。新型コロナウイルスがまん延する2020年以前から自動車船は需給バランスが崩れ、新造船の発注が途絶えた。
自動車船は原則、完成車しか積載できない特殊船。全世界でも運航中の自動車船は800隻と限られる。
それだけに、自動車船事業は完成車荷動き、とりわけ日本やアジアからの対米、対欧州の荷動きに翻弄（ほんろう）されてきた歴史がある。
海運大手幹部が語る。
「日本から完成車が600万台輸出された時代もあった。当時は冷凍コンテナ船なども投入して需要に対応した。新造船を発注しても竣工するのは3年後。当時発注した船が竣工してくる頃には、日本の年間輸出台数は400万台に落ち込み、大幅な減船を強いられた」（自動車船担当者）
※日本語記事の続きは日本海事新聞でお読みください。