South Korean shipping company Hyundai Merchant Marine has confirmed that it has signed a contract for the construction of at least five VLCCs at Daewoo Shipbuilding & Marine Engineering (DSME).
The finalized contract follows a Letter of Intent signed by the two parties back in April. The contract calls for the construction of five 300,000 dwt Very Large Crude Carriers valued at $420 million with an option for five additional vessels.
The vessels will be delivered in the first half of 2019.
“As current market prices for new VLCCs have fell to the lowest level since 2003, HMM considered this year is the right time to order new VLCCs to take a proactive action towards market change,” HMM said in a statement.
According to its website, HMM, which is known mostly as a container carrier, currently operates 3 VLCCs and 2 Suezmax tankers.
“I expect this deal will help the Korean shipbuilding and shipping industries grow together,” commented C.K. Yoo, CEO of HMM. Yoo added that the order will help HMM to “develop itself as one of the world’s most competitive shipping company.”
HMM said the vessels will be financed through its New Shipbuilding Program.