Hanwha Ocean is reserving some of its VLCC slots and raising prices to sell them to shipowners who want early delivery.
With the tanker market strengthening, Clarkson said in March that the price index for second-hand tankers, including crude tankers, rose 16% from the beginning of last year to its highest level since 2008. Among them, 300,000 dwt-class VLCCs saw the biggest rise. As of March 15, five-year old VLCCs were selling for $113 million, up 8% from the end of last year and close to newbuilding prices.
Currently, some South Korean shipbuilders are reserving some of their early delivery dates and selectively offering slots to shipowners who wish to deliver their vessels earlier. Against this backdrop, Hanwha Ocean has recently launched a tender for two VLCC slots with delivery dates in 2026. This means that shipowners in urgent need of VLCCs will only have to wait two years to take delivery of their new vessels.
Korean media stated that it is “very unusual” for shipowner companies that they need to bid for spaces in shipyards first for ordering ships.
Hanwha Ocean is offering a VLCC space tender for shipowners who are looking for a quick delivery and can accept a higher cost of construction. The delivery date of 2026 means that as soon as a shipbuilding contract is signed by both parties, the design and construction of the vessel can begin immediately. Given the small number of VLCC newbuilding slots left at Chinese and Korean shipyards, Hanwha Ocean’s tender could be an attractive option for shipping companies.
However, it is inevitable that the shipowners will have to face higher shipbuilding costs. According to reports, Hanwha Ocean’s VLCC tender offer is $130 million per unit. The $130 million unit cost is not new to the VLCC newbuilding market, with Israeli shipping company Ray Car Carriers placing an order for four 320,000 dwt-class VLCCs with HD Hyundai Samho last month at a price of $130 million per unit. Whereas the newbuild price for VLCCs was only $85.5 million in 2020, it has continued to rise sharply since then, reaching its highest level since the global financial crisis.
In February this year, Hanwha Ocean announced that it has again taken over two environmentally friendly VLCCs after a three-year break, at a cost of about $128 million per unit, which is at the same level as the current market price, for the tanker shipping company DHT Holdings. The new VLCCs, which will be built at Hanwha Ocean’s Geoje Shipyard and are expected to be delivered in the first half of 2026 and the second half of 2026, will be equipped with a variety of energy-saving devices developed by Hanwha Ocean and optimized ship types designed to minimize carbon emissions. The delivery date of this order and the delivery date of Hanwha Marine’s current tender for the vessel space are both 2026, but the cost difference is $2 million.
In order for Hanwha Ocean succeeding in this tender, it needs to find a shipping company that can generate stable profits based on long-term charter contracts. Hanwha Ocean’s asking price is expected to be at least a few million dollars higher than the market rate, so only those shipowners who can afford this cost burden can negotiate.
But according to Trade Winds, Hanwha Ocean’s “unusual” tender for slots did not receive a positive response from the market, with one newbuilding broker describing it as “uneventful”. Hanwha Ocean had no comment, saying it was disappointed with the market’s response. Another broker said the 2026 VLCC delivery date should have been attractive, and questioned whether the tender process had deterred some bidders.
In terms of quotations, Hanwha Ocean’s ideal price is at $130 million per vessel, but shipbrokers say one of the market offers is at $126 million per vessel, well below the shipyard’s price.
The two VLCC slots in Hanwha Ocean’s tender are said to be vacated by Evalend Shipping, a Greek shipping company led by Kriton Lendoudis. Hanwha Ocean also has three open liquefied natural gas (LNG) carrier slots that could see deliveries in 2027, sources said.
The current strong VLCC market is a positive for Hanwha Ocean. Clarkson data shows that there are currently 46 VLCCs on order in the global newbuilding market, accounting for only 5.1% of the global fleet. Meanwhile, the price of second-hand VLCCs of five years old is approaching the price of newbuildings, which is also a worthwhile factor for shipping companies to consider.
According to statistics, 25+10 VLCC newbuilding orders have been announced globally as of 2024, which has exceeded the total orders of 2022-2023. The series of orders are all taken by Chinese, South Korean and Japanese shipyards, with the number of 16+6, 8+4 and 1 units respectively. Chinese shipyards are leading the VLCC newbuilding market with their rich construction experience and technical capabilities.