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Shipyards struggle with soaring steel prices

Newbuild prices have surged this year, but are still far behind the cost of key construction material

Inflation being reported around the world is set to have a large impact on newbuild prices as shipyards factor in soaring costs for steel.

A chart prepared by Evercore ISI (see below) comparing the price of Chinese rebar prices and newbuild price developments for VLCCs, capesizes and large containerships shows that while there is a correlation, the magnitude of vessel values lags.

“Inflation in newbuild prices almost always translates to rising secondhand asset prices, which push up net...

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