Latsco Shipping of Greece is moving into the VLCC segment with newbuildings as low prices continue to draw shipowners to book large tankers.

The company, which is led by Paris Kassidokostas-Latsis, has commissioned Hyundai Heavy Industries to construct two VLCCs for delivery in the second and third quarters of 2022.

Officials at HHI declined to comment on the order, citing contract confidentiality. Latsco did not respond to requests for comment.

Korea Shipbuilding & Offshore Engineering (KSOE), the Hyundai Heavy Industries Holdings' subsidiary that owns HHI, announced that it has signed a KRW 200bn ($180m) deal with a European company to build two VLCCs. The shipbuilding giant did not disclose the identity of the company behind the order.

Shipbuilding sources said the reported newbuilding price of $90m per vessel appears to be higher than the current market level of around $85m. They said that may be because Latsco is fitting scrubbers.

The sources said the Latsis family is close to the Hyundai shipbuilding group and has been ordering ships there for a long time. According to VesselsValue, 87% of Latsco’s 33 ships were built by Hyundai yards.

Latsco is the second Greek company to break into the VLCC segment through newbuildings this year. Evangelos Pistiolis’ Central Shipping Group signed up for two newbuildings at HHI in May, then doubled the order to four in September.

Latsco’s order brings the total number of VLCCs that KSOE has contracted to 11 this year, which is slightly more than half of the global orders placed.

Early in November, TradeWinds reported that HHI was in talks with companies for up to 16 VLCC newbuildings worth $1.4bn. This included Latsco’s two vessels.

Shipbuilding sources said the strong interest in VLCC newbuildings is due to low prices of around $85m apiece being offered by shipyards.

Banchero Costa chief research analyst Ralph Leszczynski said that in addition to attractive pricing, VLCCs that were built in the early 2000s are due for replacement.

“If we look at the age profile for this sector, there was a big hump of deliveries in the early 2000s ... these vessels are now prime candidates for demolition or conversion as they exceed 20 years of age. They will be removed from the trading fleet in the coming few years,” he said.

“VLCC demolitions averaged just 11 units per year in the past decade, and now we are going to see an average of 30 units scrapped per year in the next five years.”

Harry Papachristou contributed to this article