On December 2, South Korea’s Hanwha Ocean announced the signing of a construction contract for 2 Very Large Crude Carriers (VLCCs) with a shipowner from the Oceania region. The new vessels are scheduled for delivery by the end of 2028.
The total value of this contract is 374.3 billion Korean won (approximately 255 million USD, 1.8 billion Chinese yuan), equating to a unit price of 127.5 million USD per vessel. For reference, Clarksons’ data shows that the current newbuilding price for a 315,000-320,000 DWT VLCC is around 127 million USD, slightly lower than the 129.5 million USD from the same period last year.
This is the second VLCC order recently secured by Hanwha Ocean. Previously, on November 24, Hanwha Ocean received an order for 4 VLCCs from Greek shipowner Maran Tankers. This also marks Maran Tankers’ first VLCC order in the past four years, with the new vessels planned for delivery to the owner by November 2028.
To date, the number of VLCC orders secured by Hanwha Ocean this year has reached 19, maintaining its position as the global leader. Furthermore, according to Clarksons’ statistical data, among the 1,015 VLCCs currently in operation worldwide, 198 were built by Hanwha Ocean, representing a market share of approximately 19.5%, also ranking first.
Including the 2 VLCC orders secured this time, Hanwha Ocean’s new ship orders received this year have reached 43 vessels, worth 7.96 billion USD (approximately 56.3 billion Chinese yuan). This represents 225% of the company’s 2023 order value of 3.53 billion USD and about 98% of its 2024 order value of 8.11 billion USD. These 43 new ship orders consist of 6 LNG carriers, 17 container ships, 19 VLCCs, and 1 polar research icebreaker.
Recently, as the Organization of the Petroleum Exporting Countries (OPEC) and the OPEC+ alliance of major oil-producing nations have increased crude oil production and exports, VLCC freight rates have continued to rise. Additionally, due to the high proportion of aging VLCCs in the fleet, the demand for replacement orders is continuously expanding. Simultaneously, with the ongoing strengthening of international maritime environmental regulations, the scrapping volume of older VLCCs is expected to increase. The VLCC newbuilding market is projected to maintain a positive trend in the short term.
Hanwha Ocean stated that this year, with the continuous flow of orders centered on LNG carriers, VLCCs, and eco-friendly vessels, the company is accelerating the solidification of its medium- to long-term earnings foundation. The signing of this VLCC construction contract will also contribute to expanding Hanwha Ocean’s order backlog and stabilizing its operating revenue.
In February of last year, Hanwha Ocean secured an order for 2 VLCCs from a shipowner in the Oceania region. This marked the company’s return to the VLCC construction market after a three-year hiatus since 2021. Throughout last year, Hanwha Ocean secured a total of 7 VLCC orders.
A Hanwha Ocean representative stated: “The company has secured nearly 20 VLCC orders this year. Leveraging the increasing demand for eco-friendly ships, we will further solidify our leading position among major shipyards.”
Hanwha Ocean expressed that the company will, based on its long-accumulated construction technology and project execution experience for various ship types including VLCCs, continuously enhance its market competitiveness and maintain its selective order-taking strategy focused on high-value-added vessel types. At the same time, the company will also proactively respond to the demands of global shipowners by leading with its environmental technology capabilities, such as improving fuel efficiency and addressing greenhouse gas regulations.
