South Korean shipyards are continuously winning contracts for very large crude carriers (VLCCs). Recently, Hanwha Ocean and HD Korea Shipbuilding & Offshore Engineering (HKSOE) have pursued high-value contracts for VLCCs as part of their strategy to diversify their vessel portfolios and prioritize selective orders for high-value-added ships to enhance profitability.
According to industry sources on March 13, Hanwha Ocean recently secured an order for two VLCCs from a shipowner in the Oceania region for 342 billion won (US$259.68 million), thereby opening the door for the highest-priced orders. This marks the highest price recorded in 16 years since the global financial crisis in 2008, and it holds significant meaning as it comes three years after Hyundai Samho Heavy Industries’ order in March 2021.
The vessels will be constructed at the Geoje Shipyard and are scheduled to be delivered to the shipowner in the first and second half of 2026, with one ship each. It is characterized as an environmentally friendly crude oil carrier, incorporating various fuel reduction devices and optimized designs developed by Hanwha Ocean. Hanwha Ocean has built a total of 185 out of the 925 VLCCs currently in operation worldwide.
Following Hanwha Ocean, HKSOE also secured an order for two VLCCs totaling 343.9 billion won from a shipowner in Oceania at the end of last month. These vessels are scheduled to be built by Hyundai Samho Heavy Industries and delivered to the shipowner by December 2026.
Industry experts evaluate that there is a gradual uptick in the activity within the VLCC market. Particularly noteworthy is the shift away from China’s monopoly on orders, which had been prevalent until last year. However, with China facing constraints on shipbuilding capacity, shipowners are increasingly turning their attention to domestic shipyards.
Furthermore, ship prices are also experiencing a notable upward trend, positioning VLCCs as a new high-profit vessel type along with LNG carriers and ammonia carriers. According to recent data compiled by Clarkson Research, a global shipbuilding research institution, the prices of VLCCs have surged by over 40 percent over the past three years since 2021 based on the new shipbuilding price index. In addition, this year, they are trading at prices over 10 percent higher compared to last year.