Available VLCC berths at the world’s top two shipbuilding nations have all but dried up for 2027.
Tanker broker Gibson notes that 2027 delivery slots in China are over, with the possible exception of a couple of slots at Shanghai Waigaoqiao Shipbuilding and Dalian Shipbuilding Industry Co, while there are no more than 12 slots left for that year in South Korea, albeit owners will have to pay $10m more to order there.
“The pace of increase in newbuilding demand across the tanker and LPG sectors has been quite extraordinary since the start of the year,” Gibson noted in a weekly report. The British broker reckons there are up to 15 VLCCs under the letter of intent stage in China and Korea separate to the 10 firm units that Capital and Frontline have ordered.
“With around 30% of the VLCC fleet 15 years or older and a further 25% to be overaged by 2027 there is a good reinvestment story here especially combined with a low orderbook (1 vessel delivering in 2024) even adjusting for above activity if confirmed,” Gibson observed.
Global shipyard forward cover over the last year has hit the highest levels since back in 2009 following the historic ordering boom from 2006 to 2008, according to data from Clarksons Research.
Danish Ship Finance is forecasting yard utilisation in South Korea will stand at 107% this year.
The Review of Maritime Transport 2023, published in September by the United Nations Conference on Trade and Development (UNCTAD), urged shipyards to expand quickly to aid with shipping’s green transition.
“Shipyard capacity is currently facing constraints. Tanker and dry bulk owners are anticipating long waiting times and high building prices. Increasing shipbuilding capacity is crucial to ensure that shipping meets global demand and its sustainability goals,” the UNCTAD report stated.