Tanker Newbuilding Prices Up 50% Since 2020

Tanker newbuilding have gone up by about 50% on average, since 2020. In its latest weekly report, shipbroker Xclusiv said that “following the previous week’s analysis on dry bulk values, we now focus on analysing the tanker price evolution over the past years. Since late 2020, NB prices have performed a stable upward trend, with VLCC, Suezmax, Aframax/LR2 and Panamax/LR1 having increased by around 50% each, while MR2s are about 39% up during that period. Tanker NB prices have climbed to the highest levels of the past 15 years, with Aframax/LR2 and MR2, sectors which are starring on the current orderbook, being just 12% and 9% down respectively from 2008’s highs. Furthermore, current NB prices are almost 20% up compared to the average prices of the past 5-year period for each sector”.

According to Xclusiv, “undoubtedly, extremely high newbuilding prices have also impacted second-hand prices, which have skyrocketed since Feb 2022. For instance, in the VLCC sector, 5-year-old vessels were valued around USD 70 million, while currently they would cost a shade below USD 110 million. During the same period, both 10 & 15-year-old prices have increased by around 67%. Remarkable is also the increase in second-hand VLCC prices noted since the beginning of Q4 2023. Prices for 5– and 10-year-old vessels have risen by around 10% and 7%, respectively. Q4 of 2023 saw strong VLCC S&P activity, with 40 sales representing almost half of the total VLCC sales of the entire past year. In comparison, Q1, Q2, & Q3 of 2023 recorded only 26, 10, and 13 transactions, respectively. So far in 2024, 12 vessels have changed hands, indicating a promising start for Q1’s S&P activity. A 5-year-old Suezmax was valued at USD 47 mills in Feb 2022, while currently it costs around USD 83 mills. 10 & 15-year-old asset prices have more than doubled, as in Feb 2022 they were valued at USD 31 & USD 21 mills respectively”.

The shipbroker added that “furthermore, during the last 4-month period Suezmax prices have gained momentum, with the 5-year and 10-year old values being 12% & 14% up respectively. Aframax 5-year-old prices have increased by around 61% during the last 2-year period. 10 & 15-year-old prices have more than doubled during the same timeframe and it is interesting that a 15-year old Aframax costs today about USD 4.5 mill less compared to the value of a 5-year-old Aframax two years ago. In the last 4-month period 5-year-old prices have increased by just 5%, while 10 & 15-year-old have risen by around 9% and 6% respectively during the same period. Last but not least, on the MR2 sector, from Feb 2022 to Feb 2024, a significant rise was witnessed on second hand prices. Back in Feb 2022, the value for a 5-year-old vessel was USD 30 mills, while now is USD 45 mills. Prices for 10 & 15-year-old vessels have also risen, valued currently at USD 37.5 mills & USD 26.5 mills respectively (88% and 121% increases accordingly)”.

“Since Feb 2022, the tanker market has enjoyed a period of exceptionally high freight rates fuelled by a confluence of factors. An all-time low orderbook, rising newbuilding costs, and geopolitical tensions created the initial momentum. This trend was further bolstered by recent events, including the Houthi attacks causing Suez bypasses, and IEA forecasts predicting strong oil demand in the coming years, further supporting and strengthening the upward trend to SnP and newbuilding values. Especially in the clean trading market, the last three months have witnessed an extraordinary surge. This coincides with the second anniversary of the Russia-Ukraine conflict, but the Houthi attacks on ships appear to be the primary driver. Compared to Dec 1st, 2023, the Baltic TCEs key routes have risen. I.e.: Med-Far East (TC15) is up 412% to USD 44,074/day, Mid East-Japan (TC1) is up 158% to USD 44,858/day & Mid East-UK (TC8) is Up 135%, at USD 51,008/day”, Xclusiv concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide