Foreign exchange and steel price pressures will limit further declines in newbuilding prices, says RS Platou Markets.
Shipbuilders are already offering up new ships at or below break-even, and RS Platou believes new ship prices have little room for further fall.
“We have reached, or at least are very close to the bottom of the newbuild price cycle,” Platou said.
It explains a fall in steel prices this year had cut the average cost of steel for a VLCC by $4m. But with steel prices turning up again since September, $1m has been placed back.
On the currency front a climb in the Korean won against the dollar means a VLCC has added almost $4m to the cost of building.
Published : November 12, 2012