According to Intermodal’s Nikos Tagoulis, Head of Research Department, “behind this export expansion lies China’s highly integrated automotive supply chain, spanning mineral processing, battery production, electric motors and vehicle assembly. According to the IEA, China accounts for 91% of global refining of magnet-related rare earths, 94% of sintered permanent magnet production and over 80% of battery cell output. Rare-earth magnets are used in many EV motors, rather than in lithium-ion batteries themselves. Such dominance provides Chinese automakers with substantial economies of scale and cost advantages, while exposing overseas manufacturers to potential supply disruptions”.

Mr. Tagoulis noted that “for the shipping sector, the implications extend beyond rising export volumes. Long-haul car shipments from China to Europe and Latin America generate considerable car-mile demand, while limited backhaul cargoes and Cape of Good Hope diversions prolong round voyages, tying up vessels and reducing effective fleet availability. Routing patterns are diverging, however, with some Chinese operators resuming Suez transits, while major European and Japanese operators continue to favour the Cape route. Against this backdrop, the 1-year time-charter rate for a 6,500-CEU PCTC climbed steadily through 2026 to approximately $95,000/day in September, 43% above its 2026 average and 21% above its 5-year average, returning to levels last seen nearly two years earlier”.

“With extended voyages absorbing vessel capacity, Chinese exporters are also exploring alternative shipping solutions, creating supplementary opportunities for containerships and MPP units. Specialised racking systems allow two to four passenger cars to be secured inside a standard 40-foot container, depending on vehicle dimensions, for shipment through established liner networks. MPP vessels can alternatively carry vehicles on purpose-built flat racks. Illustrating this practice, COSCO arranged three containerised shipments totalling 13,052 vehicles from China to Europe during 2026. Nevertheless, these movements remain marginal, with minimal impact on containership and MPP tonnage demand”, Mr. Tagoulis added.

Meanwhile, Intermodal’s analyst noted that “elevated PCTC earnings and tight vessel availability have prompted a substantial supply-side response. PCTC newbuilding contracts surged to 82 vessels in the first nine months of 2026, against just nine throughout 2025 and a 10-year annual average of 35. Consequently, the orderbook-to-fleet ratio stands at 26%, well above its historical average of 14%, raising concerns over future oversupply. However, with 64% of orderbook tonnage scheduled for delivery from 2028 onwards, much of the capacity expansion remains backloaded, limiting immediate supply pressure. Chinese automakers are also expanding their own shipping fleets, potentially reducing their reliance on the open charter market”.

“Alongside the anticipated fleet expansion, European trade policy presents a further challenge to the demand outlook. In October 2026, the EU and China reportedly reached a preliminary understanding on proposed restrictions covering Chinese-built conventional and plug-in hybrid vehicles. Under the proposed four-year arrangement, potentially taking effect in December 2026, annual imports would initially be capped at 350,000 units, with the quota increasing by 6% each year, subject to formal implementation. Battery-electric vehicles would remain subject to separate EU anti-subsidy duties. Against projected Chinese hybrid imports of around 800,000 units in 2026, these measures could significantly constrain shipment growth along the China–Europe corridor. The impact on car-mile demand will largely depend on manufacturers’ ability to redirect exports to alternative markets or expand overseas production”, Mr. Tagoulis said.

“Looking ahead, strong Chinese exports and extended voyages should continue to support PCTC earnings in the near term. However, accelerating vessel deliveries from 2028, potential Suez normalisation and growing trade barriers could gradually erode current market tightness. The key question is whether China’s export expansion generates additional global car-mile demand or merely displaces shipments from established producing countries. Ultimately, the outlook of the PCTC market will hinge on whether car-mile demand can keep pace with the anticipated fleet expansion”, Intermodal’s analyst concluded. Nikos Roussanoglou, Hellenic Shipping News Worldwide