It is now cheaper to build a tanker in Korea than China

China and South Korea are vying for the title of number one holder of tanker orders, with Japan some way behind, according to data provided by mapping, ship search and valuation provider, VesselsValue.

Builders in South Korea only just edge out China by number, but with an orderbook of nearly US$20 billion, South Korea holds 40 per cent of the orderbook by value. Although it is difficult to compare the tanker orderbook of one country against another without going into great detail about the specification and compensated gross tonnage of their respective orderbooks, it is interesting to note that on a macro level, South Korea appears to be the cheapest tanker builder on an average US$/dwt basis.

According to VesselsValue, the average value of a tanker newbuilding on order in South Korea stands at US$426/dwt versus US$440/dwt for China. Compared to these two, Japan is still seen by many observers as the reference builder when it comes to tankers, and some might say deserves the premium evident in the average of US$580/dwt. The highest average per US$/dwt belongs to the USA, but of course, vessels on order in the USA are constructed under the Jones Act, which in part accounts for the US$2,600/dwt price.

In terms of the capacity on order, there is one shipyard group that stands out. The Hyundai shipbuilding group has 179 contracts on order with a value of nearly US$10 billion, almost as much as the next four shipyards, when ranked by value of tankers on order.

As might be expected, the VLCC sector is the largest capacity on order, but in terms of value, it is rivalled by the handymax sector.