Shipbuilder's Cost-Push Inflation

In this weeks' analysis by MOIC, we look at inflationary effect of different cost-input variables of shipbuilders in the Republic of Korea. As one of the premier shipbuilding nations with multiple levels of technological production capacity, we find it instructive to review the dynamism steel price, labor productivity and real growth rates in Korea may have on the break even economics of shipbuilder across LNG, LPG, Dry, Product and Crude tankers.

We find both symmetrical and substantive effect of most of these variables, and given the market power of the concentrated industry, we suspect limited benefits will accrue to potential customers (eg productivity gains), rather the market looks quite ripe for an inflationary trend into 2024.

MOIC 10 Jan.pdf

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