No Slack in VLCC Rush, Exploitation of Low Market Prices


There has been no slackening in the VLCC rush. Owners are still exploiting low prices which, for this type, slipped back again. Hong Kong based conservative owner Tai Chong Cheang booked two VLCCs at US$79.9 million apiece.

No room for fixed employment:

The owner has confirmed no employment is fixed at this stage but the savings in cost are worth it before prices go up. The duo will be built by Hyundai and enforces the view that after a shocking 2016 South Korea is now building up quite a pipeline of tanker newbuildings. Greek tanker owner Enesel exercised an option for a third VLCC at Hyundai and still retains a berth slot option for a fourth unit, which if exercised, would be delivered in 2019.

Tender launched for VLCC:

Kuwait Oil Tanker Co. (KOTC) has launched its tender for one VLCC and three 84,000m3 LPG carriers collectively valued at around US$370 million. Four MR2 50,000 dwt products carrier may be tendered later in a second newbuilding move. Closing for offers is around June 2017.

Builders in the frame are Jiangnan Shipyard, Hyundai and Kawasaki Heavy Industries. A decision on the current tender is expected in the third quarter of 2017. Prices are some 30 per cent above the normal rate probably because of the high-quality specifications demanded.

Orders secured:

Staying with product carriers, Hyundai Mipo is said to have secured orders from UK owner Union Maritime for two (with an option for two more) 50,000 dwt MR2 products carriers. Delivery is slated for the third quarter of 2018. It is not yet known whether Hyundai Mipo will use its Vietnamese subsidiary Hyundai Vinashin to fulfil the order. The vessels are understood to be US$32 million each.

This year 16 MR2 orders have been won by Hyundai Mipo. The contracts feature IMO Tier II engines which gives a US$1-2 million saving per ship and lower maintenance costs.

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Source: Tanker Shipping


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