VLCC newbuilding prices hit lows

Crumbling rates for large tankers and a lack of finance for new projects means the Singapore company’s order is unlikely to be the start of an order run.

News ID: 68016

Date: 08 August 2016 - 12:20

According to MANA,Brokers say VLCC newbuilding prices at South Korean shipyards are now standing at $85m to $86m per ship. One details that this is the cheapest seen since 2004.

“Most people think the price is now $82m to $83m,” one VLCC player told TradeWinds. “But who is going to go to the yards and take a view in today’s market for a delivery further down the line? I honestly don’t know.”

He says that even if VLCC prices do prove attractive — some newbuilding brokers believe these levels will prove tempting for owners of 10 to 12-year-old ships considering fleet-renewal plans — there is little finance available for all but the top-tier companies.

equivalent (TCE) levels for VLCCs have slipped to rates in the high teens on the back of a wave of new deliveries, lower tonne miles and reductions in waiting time at ports.

BW Group’s confirmation of the two 318,000-dwt vessels at DSME for delivery in 2018 renewed attention on VLCC new buildings this week.