The world’s second-largest shipbuilding country, South Korea, has won its first VLCC newbuilding contract in three years — at the highest price “since the 2008 global financial crisis”.
New York-listed DHT Holdings is said to be the company to have ended the drought with a firm two-ship deal at Hanwha Ocean — the former Daewoo Shipbuilding & Marine Engineering — disclosed on 23 February.
If confirmed, it will also mark DHT’s return to shipbuilding after a seven-year hiatus.
The shipbuilder said it had struck a deal with an “Oceanian shipper” for two 300,000-dwt tankers to be delivered by the end of 2026.
It did not disclose the buyer’s name but said the contract involved two firm vessels plus options for an undisclosed number of additional ships.
Shipbuilding sources following DHT said it holds options for an additional two VLCCs.
TradeWinds has contacted DHT for confirmation.
Hanwha Ocean said the contract value for the firm pair is KRW 342bn ($256m) or $128m apiece.
The eco-friendly newbuildings will be equipped with fuel-saving devices developed by the shipyard that minimise carbon emissions.
“This is Hanwha Ocean’s first contract for VLCC newbuildings in three years since 2021,” the shipyard told the Korean press. “These are also the highest price [VLCC newbuildings] in 16 years, since the 2008 global financial crisis.”
Early this month, DHT chief executive Svein Moxnes Harfjeld said his company had “opened the door for newbuilding orders, takeovers and secondhand deals amid a highly constructive supply picture for the market”.
Harfjeld was upbeat in the short and longer term about the tanker market because of disruptions in the Red Sea, an ageing global fleet and a limited orderbook.
According to VesselsValue, the last time DHT ordered new VLCCs was in early 2017, when it booked two vessels at Hyundai Heavy Industries at a reported price of $82.4m each.
The 318,000-dwt scrubber-fitted pair, DHT Mustang and DHT Bronco, was delivered in 2018.
There has been a flurry of VLCC newbuilding activity after more than two years of historically low contracting that has left the orderbook at just 2.5% of the trading fleet.
Clarksons’ Shipping Intelligence Network shows there were 35 VLCCs on order before the two newbuildings at Hanwha Ocean: four at Japanese shipyards and 31 in China.
The last VLCC newbuilding contract that South Korea signed was in February 2021, from Maria Angelicoussis-controlled Maran Tankers.
The Greek shipowner ordered four LNG dual-fuel 320,000-dwt ships that cost $103.8m each.
Brokers said South Korean shipyards were not active in the VLCC market for the past three years because they were busy contracting large container ships, dual-fuel LPG carriers and LNG carriers.
Hanwha Ocean posted a net profit of KRW 160bn ($119.8m) for 2023.
It is optimistic that it will continue to make a profit this year, as it will finish delivering the remaining low-price newbuildings contracted in 2021 and early 2022, and begin delivering more recently contracted high-value vessels such as LNG carriers.
Hanwha, which did not disclose its order target for 2024, has so far secured four newbuildings including DHT’s tankers.
Greece’s Alpha Gas is the other company that has booked newbuildings there: two very large LPG-ammonia carriers at $123.5m each for delivery by the end of August 2027.
