China’s Yangzijiang Shipbuilding has inked letters of intent with four shipping companies in Europe for a total of 12 conventional-fuelled product tanker newbuildings worth about $700m.
Oslo-listed Hafnia and three Greek companies — Metrostar Management, Pantheon Tankers and Union Maritime — were named as the shipowners that have provisionally booked the tanker slots at the shipyard, which is better known for building container ships and bulk carriers.
Shipbuilding sources said Pantheon Tankers and Union Maritime have each signed up for two 114,000-dwt aframax product carriers, while Metrostar Management has inked two LR1 and two LR2 vessels. Hafnia has provisionally placed an order for four LR1 tankers.
Sources said Yangzijiang’s tanker slots were sold out very quickly due to strong demand for the ship types and early delivery dates of 2025.
“We heard the newbuilding slots were snapped up overnight,” said one source.
They added that Yangzijiang originally reserved the newbuilding slots for a series of large container ships but free up the berths after losing the deal to a South Korean shipyard.
The boxship newbuilding project was not disclosed but the Singapore-listed shipbuilder was reported to be vying with Hyundai Heavy Industries for Yang Ming Marine Transport’s five 15,000-teu to 16,000-teu vessels that will be powered by LNG. The total value of the neo-panamax boxships was reported to be worth at least $900m.
Officials at Yangzijiang declined to comment on the shipyard’s newbuilding activities, citing contract confidentiality.
Shipbuilding sources believe the four shipping companies will officially ink the newbuilding contracts as the scrubber-fitted tankers are attractively priced.
Yangzijiang is said to have marketed the Shanghai Merchant Ship Design & Research Institute-designed LR2s at about $62m each and the Marine Design & Research Institute of China-designed 74,000-dwt product carriers in excess of $50m apiece. The LR1s are also said to be priced at around $50m each.
Newbuilding brokers said reputable South Korean yards are seeking at least $10m per ship more for an LR2 tanker and over $50m for the smaller product carrier.
There has been a surge in orders for LR2 tanker newbuildings in recent months. TradeWinds calculated at least 11 newbuildings were ordered since the start of this year. Clarksons’ orderbook shows there are 43 LR2s booked at shipyards.
Some tanker players believe the prospect for LR2 tankers is growing as the market is set to benefit from Russian oil sanctions.
Ralph Leszczynski, Banchero Costa global head of research, said the general trend in recent years has been that long-haul clean products trades have been growing as refining capacity expands in places such as India and the Middle East, with new modern export-oriented refineries, while older refineries in Europe and places like Australia and South Africa close down as they find it financially uncompetitive.
As for LR1 tankers, brokers said the ship type has not been ordered for some time and currently the orderbook stands at five — four 80,000-dwt LR1s booked by Emepco FZE at Haidong Shipyard and one at Onomichi Dockyard.
Harry Papachristou and Lucy Hine contributed to this article
