Car Carrier asset prices move into the fast lane
Astonishing amounts of money have been spent on Vehicle Carrier newbuilds in recent weeks, driving asset prices through the roof with a total of $4.4 billion, including options, having been agreed year to date. Not bad for such a niche sector.
Our Head of Vehicle Carriers, Dan Nash, takes us through the soar in secondhand sales, market conditions being shaped by a short supply of tonnage, share price slumps for leading car manufacturers due to the chip dip crisis, increasing global demand for battery electric vehicles and an ever widening supply-demand imbalance as we look ahead into 2022.
“Rapid steel price inflation combined with a post Covid supply vacuum, have skyrocketed newbuild prices following a baron period of low orders stretching back to 2016. All 40 Vehicle Carriers confirmed this year (56 including options) are dual-fuel LNG powered, forming a premier PCTC/LCTC asset class for an electrified car market.
Secondhand sales prices exploded in Q2 as operators battled to secure tonnage. Twenty-two year old ASIAN KING (6400 CEU, Dec 1998, Hyundai Heavy) sold for an eye watering $23 million in June. A remarkable price when you consider the PERSEUS LIBERTY (6,400 CEU, Jan 1999, Imabari) of very similar age and size sold for $13.8 million just two months earlier. It’s a seller’s market, buyers beware.
Values for 10YO and 20YO PCTCs have shot up following some exceptionally high sold prices paid by buyers with few alternatives. Car Carrying assets are hot property, but next year could get hotter…”
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