Export-led demand continues to absorb fleet growth

Chinese exports remain the primary demand engine
The PCTC segment remained resilient through February, with utilisation supported primarily by strong Chinese vehicle export activity. Owners continued to report solid contract coverage across key routes, reinforcing China’s position as the dominant marginal supplier of seaborne vehicle volumes.

Fleet growth largely absorbed in the near term
Despite a sizeable orderbook, recent export growth has absorbed a meaningful share of incoming capacity, limiting open vessel availability in the short term. As a result, utilisation across core Asia-linked trades has remained firm, indicating the market continues to operate with limited slack.

European softness supports Chinese export momentum
Recent industry data point to a more divergent regional demand picture. European new-vehicle registrations declined 3.5 percent in January, with Germany and France leading the drop, underscoring ongoing weakness among European automakers. At the same time, Chinese manufacturers continue to gain global share and expand exports. As Citigroup analyst Harald Hendrikse noted, “China market share gains will accelerate, as China tries to export its excess auto capacity.” The trend may strengthen further following Germany’s new €3 billion EV subsidy program, which is open to all manufacturers, including Chinese brands that already accounted for roughly 11 percent of electrified vehicle sales in Europe last year. The shift is supportive for PCTC demand, as rising Chinese export volumes increasingly offset softer European production and reinforce China’s role as the primary marginal driver of seaborne vehicle flows.

Manufacturing localisation remains a medium-term watch point
Structural shifts in automotive supply chains are also developing. Chinese OEMs are exploring production closer to end markets, while policymakers in Europe and the United States are considering measures that could influence future vehicle trade patterns. Over time, these trends could moderate long-haul tonne-mile growth, though the near-term impact remains limited.

Near-term conditions remain constructive
Overall, February confirmed that export-led demand continues to underpin PCTC utilisation. While policy developments and fleet growth warrant monitoring, current market conditions remain supported.