Israeli shipowner Ray Car Carriers has placed an additional order for 4 VLCCs with HD Korea Shipbuilding & Offshore Engineering.
According to foreign media reports, Ray Car Carriers is the shipowner behind the 4 VLCC construction contracts announced by HD Korea Shipbuilding & Offshore Engineering on November 21st. The new vessels will use conventional fuel. According to a previous announcement from HD Korea Shipbuilding & Offshore Engineering, these 4 new vessels will be built at HD Hyundai Samho and are scheduled for delivery successively by mid-August 2028.
The total contract value is 762.7 billion Korean Won (approximately 517 million USD, 3.68 billion Chinese Yuan), equivalent to a unit ship cost of 129 million USD. For reference, Clarksons’ data shows that the current newbuilding price for a 315,000-320,000 DWT VLCC is about 127 million USD, slightly lower than the 129.5 million USD from the same period last year.
Including the latest order, Ray Car Carriers currently has 8 VLCCs on order at HD Hyundai Samho. In March of last year, the company ordered 4 300,000-ton VLCCs at HD Korea Shipbuilding & Offshore Engineering at a similar price, scheduled for delivery in 2027.
It is understood that Ray Car Carriers was founded in 1992 and has now developed into one of the largest operators in the car carrier market, owning and managing a modern, high-specification fleet and serving top global shipping companies through long-term time charter contracts. Currently, the company operates 65 vessels and has 6 LNG dual-fuel powered 7,580 CEU car carriers on order at HD Hyundai Mipo.
Ray Car Carriers first entered the VLCC market in 2022, purchasing the second-hand VLCCs “Water Tiger” and “Sea Lion” (both built in 2020) from the Oslo-listed Hunter Group for 95.5 million USD each. These two vessels are currently chartered by the commodity trading giant Trafigura.
Industry sources stated that the latest VLCC order is a significant part of Ray Car Carriers’ push for diversification and expansion plans. As the tanker market is in an upward cycle, the company is reinvesting profits from its car carrier business into the VLCC market.
Recently, there has been a surge in new VLCC orders. Clarksons’ data shows that the number of new VLCC orders since July has reached 38, compared to only 12 in the first half of this year. Ralph Leszczynski, Global Head of Research at Banchero Costa, said the reason for the order growth is previous underinvestment and an optimistic medium-term market outlook.
Currently, VLCC daily earnings on the Middle East Gulf to China route have exceeded 140,000 USD, reaching the highest level in nearly five years. Leszczynski pointed out that it is very normal for a wave of orders to appear when the spot market rises, as shipowners “put the increased cash flow into new capacity.”
He stated: “We are also observing structural shifts favorable to the VLCC sector. In the past few years, ton-mile demand mainly came from Russian crude oil taking detours to India and China, while Middle Eastern exporters like Saudi Arabia, the mainstay of VLCC demand, were cutting production. Now Saudi Arabia is significantly increasing production, and in the future, China and India might also reduce their reliance on Russian crude due to sanctions, turning to more purchases of Middle Eastern crude. This is clearly very beneficial for the VLCC sector.”
Including the latest VLCC orders, HD Korea Shipbuilding & Offshore Engineering’s total orders received this year have reached 116 vessels, worth 16.22 billion USD (approximately 115.16 billion Chinese Yuan), completing about 89.9% of its annual order target of 18.05 billion USD (approximately 128.2 billion Chinese Yuan). These orders comprise 7 LNG carriers, 6 LNG bunkering vessels, 69 container ships, 2 VLECs, 20 oil tankers, 3 product tankers, and 9 liquid ammonia carriers.
