Robust market fundamentals point to a favorable outlook extending beyond 2026
One-year time charter rates for Suezmax and Aframax vessels remain at historically high levels, providing owners with strong margins and clear earnings visibility through 2026.
This sustained momentum reflects the underlying strength of market fundamentals, supported by stable freight volumes, a limited vessel supply, and ongoing shifts in trade routes. For investors, this environment establishes a resilient market foundation with additional upside potential should new sources of demand arise.
VLGC Market Overview
VLGC spot rates have reached their highest level in twelve months, with Middle East–Japan voyages exceeding $74,000 per day and significant increases also seen on US Gulf–Asia routes. This firmness is driven by a limited vessel supply, further supported by rising US production and increased volumes from the Middle East as OPEC+ cuts wind down. Congestion in the Panama Canal is exerting additional upward pressure, with some owners already considering the Cape of Good Hope route if delays persist. Analysts expect rates to remain elevated in the coming months, with ongoing arbitrage opportunities and a restricted vessel list contributing to a constructive short-term outlook and an attractive risk–reward profile for VLGC exposure.
PCTC: China’s subsidy adjustments create a temporary standstill
Analysts are observing mixed signals in the car carrier segment. While electric vehicle demand continues to support medium-term trade flows, especially into Europe, growth has slowed in China due to the timing of subsidies, generating short-term volatility. DNB Carnegie has downgraded Wallenius Wilhelmsen and Höegh Autoliners to “hold” following strong share price increases, citing heightened trade barriers, structural risks from Chinese vehicle exports, and a large delivery pipeline as headwinds. Pricing remains firm and orderbooks provide some cushion, but sentiment is shifting toward a more balanced risk–reward outlook for listed PCTC companies.
Geopolitics: Trump’s opposition to the IMO Net-Zero framework
US President Donald Trump has reiterated his criticism of the IMO’s Net Zero climate strategy, describing it as a “global carbon tax” and warning of potential retaliatory measures against countries that support the initiative. Analysts caution that US non-participation could undermine IMO authority and slow the implementation of the plan, which includes new fuel standards and CO₂ pricing starting in 2027 (Read more here).
Sources: BRS Brokers, Reuters & TradeWinds