VLCC orders push newbuilding crude tanker activity 47.7% higher
Surging steel prices see VLCC prices now at $95m at Japan shipyards compared with $88m average price in 2020, says Greece-based shipbroker Intermodal
Steel accounts for 40% of shipbuilding cost, with slots to build tankers becoming scarce as containership orders rise
NEWBUILDING contracts for crude carriers are 47.7% higher than at the same period in the past year, despite rising steel plate prices, according to a weekly report published by Greek shipbroker Intermodal.
Contracting activity for crude carriers is estimated at 9.6m dwt, Intermodal said, citing preliminary data compiled by its research team, compared with 6.5m dwt in the first five months in 2020.
“The majority of orders that have materialised so far this year referred to very large crude carrier units, which account for 71% of the total orders, or 27 of the total tanker contracting activity of 38 units,” the report said.
“If buying interest for crude carrier tonnage continues at the same pace, it would not be a surprise to see 2021 contracting activity doubling the previous year volumes of around 15.4m dwt.’’
Some 19.6m dwt of crude carrier newbuilding tonnage was ordered in 2019, of which 7.5m dwt was contracted in the first five months, according to Intermodal.
Prices for new ships are the highest since 2015, reflecting gains in steel plate prices.
Average prices for VLCCs, suezmax and aframax units at “top tier yards” are estimated at $95m, $63m and $50.5m, respectively.
VLCC newbuildings were priced at $88m in 2018, $92m in 2019 and $88m in 2020, the shipbroker assessed.
The report underscored the impact of soaring steel prices on newbuilding costs.
Steel “represents 40% of current inflated newbuilding prices,’’ according to a report from Greece-based EastGate Shipping, a dry bulk shipbroker.
In the dry bulk sector, a Japanese-built kamsarmax newbuilding had risen in price from the “high $20m” to topping $32.5m, EastGate Shipping said.
Some 188m dwt of newbuildings delivered from 2021 to 2025 will be tankers, according to the Lloyd’s List Intelligence Shipbuilding Outlook’s April report. Tankers comprise about a third of the global fleet.
Dominating the VLCC orderbook this year are Greek owners, including companies Central Group, Latsco Shipping, Maran Tankers, Athenian Sea Carriers, Capital Maritime, Navios and Samos Steamship.
An influx of containership orders on the back of billion-dollar pandemic profits has also hastened decision-making as slots for ships are quickly filled. It is very difficult to get a slot for delivery before 2023, one shipowner told Lloyd’s List earlier this month.