The VLCC market has witnessed an "order rush" this year. Greek shipowners have placed new orders after many years and have chosen to order new ships from Chinese shipbuilding enterprises for the first time. In this high-value-added shipbuilding field that was once dominated by South Korea, the Chinese shipbuilding industry has grabbed nearly 80% of the orders all by itself, successfully achieving another overtake.
It is reported that Greek shipowner Pantheon Tankers has placed an order with Dalian Shipbuilding to build two 307,000 deadweight tonnage traditional fuel Very Large Crude Carriers (VLCCs). This order was signed in early April. The new ships are expected to be delivered in 2027 and will be equipped with desulfurization devices. The cost of each ship is approximately 120 million U.S. dollars, and the total transaction amount is about 240 million U.S. dollars (equivalent to approximately 220.8 million euros).
For reference, according to data from Clarkson, the current price of a newbuilding VLCC with a deadweight of 315,000 - 320,000 tons is 130 million U.S. dollars, an increase of 7% compared to 122 million U.S. dollars in the same period last year.
This is the first VLCC order of Pantheon Tankers in six years since it placed an order for two VLCCs with Daewoo Shipbuilding (now Hanwha Ocean) in South Korea in March 2018. It is understood that Pantheon Tankers was established in 2012. Currently, it has 39 oil tankers under its ownership with a total transport capacity of 5.64 million deadweight tons, including 9 VLCCs, 9 Suezmax tankers, 7 Aframax tankers, and 14 MR product tankers.
At the same time, this order is also the first time that Pantheon Tankers has ordered VLCCs in China. Data from Clarkson shows that most of the VLCCs in the fleet of this company are built by South Korean shipbuilders. Only two second-hand ships are from Chinese shipyards. Among them, a 308,203 deadweight tonnage VLCC "Sea Majesty" (built in 2017) was delivered by Dalian Shipbuilding. This ship was sold to Pantheon Tankers at a price of 71 million U.S. dollars in 2022 and joined the company's fleet.
In addition to the order of 2 VLCCs from Dalian Shipbuilding, according to data from Clarkson, Pantheon Tankers currently also has an order of 4 115,000 deadweight tonnage LR2 product tankers with COSCO Shipping Heavy Industry (Yangzhou). These ships are planned to be delivered in 2025 and 2026.
Since the beginning of this year, the global VLCC newbuilding ship market has accelerated its recovery. Data from Clarkson shows that as of now, the new ship orders for VLCCs this year have reached 28 ships, exceeding the total of 18 ships for the whole year of 2023. In particular, the new ship orders in a single month of February this year reached 18 ships, setting the highest monthly order record since 22 ships in June 2015.
However, among the 28 VLCC orders so far this year, 20 ships have been undertaken by Chinese shipbuilding enterprises. This includes the 2 319,000 deadweight tonnage VLCCs ordered by the commodity trading giant Trafigura in February this year at Jiangsu Hantong Ship Heavy Industry Co., Ltd., which is the first "new shipyard" in the VLCC construction field this year.
The remaining 8 VLCC orders this year have been undertaken by South Korean shipbuilding enterprises, including 2 ships by Hanwha Ocean (formerly Daewoo Shipbuilding) and 6 ships by HD Hyundai Samho (formerly Hyundai Samho Heavy Industries). This is also the return of Hanwha Ocean and HD Hyundai Group to the VLCC market after a lapse of three years.
Analysts point out that the current VLCC newbuilding ship market is completely different from the situation six years ago when South Korea dominated. Back then, South Korean shipbuilders held more than half of the global VLCC orders on hand. In recent years, due to the improvement in the quality of ships built by Chinese shipbuilding enterprises, an increasing number of shipowners have chosen to order VLCCs in China. Competitive ship prices and relatively earlier delivery dates are also considered factors attracting more shipowners to place orders.
According to data from Clarkson, as of now, there are a total of 50 VLCC orders on hand globally with a deadweight of 15,536,800 tons. Among them, as many as 38 ships with a deadweight of 11,845,000 tons are being built by Chinese shipyards, accounting for a whopping 76%; there are 8 ships under construction in South Korea and 4 ships in Japan.
VLCC is a traditional advantageous ship type of Dalian Shipbuilding. As the ship final assembly plant that delivered China's first VLCC, Dalian Shipbuilding has cumulatively delivered 117 VLCCs to shipowners from various countries up to now, firmly ranking first among Chinese shipyards in terms of the number of deliveries. From the beginning of 2023 to now, Dalian Shipbuilding has undertaken new ship orders of 15 plus 4 VLCCs. During the same period, its market share accounts for more than 50%. In the first quarter of this year, Dalian Shipbuilding just signed orders for 6 plus 2 VLCCs with conventional fuel power and 4 plus 2 VLCCs with LNG dual-fuel power respectively with two well-known European shipowners.
Data from Clarkson shows that among the top five individual shipyards in terms of current VLCC orders on hand, two are from Dalian Shipbuilding Group, namely DSIC Tianjin (ranked first with 9 ships) and Dalian Shipbuilding (ranked fourth with 6 ships).
As of now, the total number of orders on hand of Dalian Shipbuilding Group amounts to 104 ships with a deadweight of 13.93 million tons. Among them, including 2 floating production storage and offloading units (FPSOs), 14 oil tankers, 2 container ships and 15 175,000-cubic-meter LNG ships (a total of 33 ships) for Dalian Shipbuilding; 9 oil tankers, 3 bulk carriers and 12 container ships (a total of 24 ships) for DSIC Tianjin; and 21 oil tankers, 2 container ships, 5 open-hatch ships and 19 bulk carriers (a total of 47 ships) for Shanhaiguan Shipbuilding Industry under Dalian Shipbuilding. The delivery schedule has been arranged up to 2028.
Translated by Gao Xiaotong