Plunging VLCC values, both newbuilding and secondhand, could be reaching the bottom in the end.
Saga Tankers’ recent sale of the 298,920-dwt Saga Unity (built 2000) for $29.4m showed prices have more than halved in only a year and a half amid widespread expectation further pain lay ahead.
However, according to Charles Weber there are reasons to believe tanker values are approaching the trough.
In its weekly report it notes VLCC newbuilding price tags are unlikely to sink below the $100m paid for three new tankers at Hyundai Heavy Industries last week.
“Relative to pre-financial crisis steel/newbuilding price correlations, a $100m order price actually represents an attractive discount,” Weber said.
At the other end of the age scale a jump in offshore oil production projects, especially in Brazil, will bring a spurt of interest in 1990s built VLs for conversion during the next 18 months to two years, it explains.