Sealing The Deal

The significant increase in newbuilding tanker prices is well known. From $67.3 million in October of 2003, prices climbed rapidly over the next 18 months and have remained relatively steady at a price in the range of $128 million. With a strong orderbook for all vessel sectors, the market for newbuilding vessels does not appear to be losing momentum. The chart below shows the assessed newbuilding and second hand prices for modern double-hull VLCCs, and the ratio between the two prices. Expected future freight rates and resulting order volume is one driver of increased vessel prices – the other are increasing regulations.