Daewoo Shipbuilding & Marine Engineering Co, the world's second-largest shipyard, won an order to build three supertankers for a record US$130 million each, broker Simpson, Spence & Young said yesterday.
The price is the highest paid for a so-called very large crude carrier (VLCC), a tanker that can ship 2 million barrels of oil, according to Clarkson Plc, a London-based broker, which began tracking prices in 1976.
The cost of building a VLCC has more than doubled since September 2002 as builders pass on rising steel costs and demand for ships outstrips yard capacity. Daewoo, based in Seoul, South Korea, will deliver the ships in 2008 to Ghassan Ghandour, an Athens-based tanker owner, Simpson Spence said in an e-mailed report.
Ghandour and other owners are willing to pay record prices as they bet rising oil demand will keep earnings from tankers above historical averages.
"The fact is shipyards' pricing power continues to increase," said Song In-ho, who helps to manage around US$350 million of investments including shipbuilding shares at Kyobo Investment Trust in Seoul. "The crux of this is strong demand for shipping."
Ghandour, who manages his shipping investments through Gulf Marine Management, has secured the option to order two more VLCCs at Daewoo, Simpson Spence said. Ghandour placed an order for three VLCCs at Daewoo in January for US$120 million each, the broker said.
"Yards are still bullish on pricing," Oslo-based broker R.S. Platou AS said in a report on Friday. This is "due to continued high demand and more than comfortable order backlogs."
W.K. Ki, Daewoo's chief marketing officer, wasn't available when telephoned by Bloomberg News.
Ghandour's office in Athens was closed.
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