The first half of 2025 marked a turning point for the car carrier market, with rates and values continuing to normalize after several years of exceptional highs. While conditions are not yet fully aligned with historical averages, the trajectory suggests a soft landing is underway, supported by a combination of cooling demand, increased supply, and macroeconomic headwinds.

Time charter rates for standard vessels corrected sharply in H1 2025, driven by a surge in newbuild deliveries and weakened sentiment tied to U.S. Trade Representative tariffs and sluggish Asian exports. Large Car Truck Carriers (LCTCs) boosted global capacity by 5%, predominantly in China, while light vehicle export growth from Asia rose by a more modest 4%. This imbalance contributed to a 44% decline in the VesselsValue 1-Year 6,500 CEU Time Charter Index by June, effectively ending the record rate environment sustained since the pandemic.

Despite a generally subdued short-term outlook, there are still pockets of resilience. Notable three-year charter agreements, such as CMA CGM’s January fixture of the Lake Fuxian (6,300 CEU, Nov 2009, Shin Kurushima Onishi Japan) at USD 38,000 per day and Hede International Shipping’s June deal for the Paganella (5,000 CEU, Oct 2009, Yangfan Zhoushan China) at USD 27,000 per day, highlight that owners of well-positioned tonnage can still secure strong returns. These exceptions are helping guide the market into a more stable phase, rather than a steep downturn.

In the sales and purchase (S&P) segment, liquidity remained constrained. Only nine deals were concluded in H1 2025, including three exercised purchase options. This was roughly 50% lower than activity levels seen in H1 2021 and 2022. Nevertheless, headline transactions such as the sale of Caelum Ace (7,000 CEU, Jul 2025, Shin Kurushima) and Angelite Ace (7,000 CEU, Jun 2025, Tadotsu Imabari) to Seaspan Corporation for USD 105.3 million each show that buyers are still pursuing strategic long-term plays despite a quieter market.

On the asset value front, standard 10-year-old 6,500 CEU and 4,000 CEU vessels saw valuations fall to USD 83.4 million and USD 63.7 million respectively, both down about 11% since the start of the year. The softening of asset values reflects a cooling market, though not a sharp collapse.

Perhaps most significantly, the ordering cycle appears to have peaked. No new car carrier orders were placed in the first half of 2025, compared to an average of 30 ships per half year from 2022 through 2024. Owners are pulling back after years of high investment, influenced by more moderate freight markets and slower trade growth. China remains the leading player both as a builder, accounting for 83% of orders, and as the top ordering nation, followed by Norway, Japan, and Italy.

The outlook suggests a widespread return to Red Sea routes is unlikely before 2027. This delay, combined with restrained ordering and measured S&P activity, supports the view that the market is gradually correcting as it moves toward a more sustainable long-term balance.
Source : Veson Nautical