VLCC prices to rise above $100m per unit, according to EA Gibson Shipbrokers

10 February 2014 (Last Updated February 10th, 2014 18:30)

The prices of very large crude carriers (VLCCs) are set to grow to more than $100m a unit, according to UK-based EA Gibson Shipbrokers.

EA

The prices of very large crude carriers (VLCCs) are set to grow to more than $100m a unit, according to UK-based EA Gibson Shipbrokers.

The shipbroker found that the Greek shipping firm Capital Maritime has shown its willingness to pay higher prices for VLCC newbuilds at the South Korea-based Daewoo Shipbuilding & Marine Engineering (DSME).

If secured, the order will set new industry benchmark.

According to shipping experts, DSME is looking to secure the orders for two vessels from Capital Maritime at approximately $99m per ship.

"Capital is willing to pay $99m per ship as DSME is offering the rare 2016 delivery slots." 

One expert said that this price is above the market level of mid $90m per ship, that broking reports have published.

DSME is close to finalising a deal with Capital for 320,000dwt tankers, with delivery scheduled in 2016.

According to a source familiar with the matter, Capital is willing to pay $99m per ship as DSME is offering the rare 2016 delivery slots.

Shipping experts said that Hyundai Heavy Industries has sold almost all of its 2016 berth slots for VLCCs and is not currently seeking to secure further contracts, as some suggest it is looking for $103m for new VLCCs.

Meanwhile, Samsung Heavy Industries is willing to enter VLCC newbuilding discussions, provided that firms are able to pay $110m per vessel.

EA Gibson has compared this cost with the record $175m DSME secured at the height of the market in 2008.

In the final quarter of 2013, the shipbuilding market secured contracts for 33 VLCCs with continued growth in demand.


Image: Graph showing the increase in prices of VLCCs over the last decade. Photo: courtesy of EA Gibson Shipbrokers.