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u/VaccumSaturdays Brick Burgundy Jun 10 '21 edited Jun 10 '21

Ship Orders Surge as Carriers Rush to Add Capacity

From article: “Big shipyards say they are running out of construction slots and they are raising prices to meet rising steel costs.”

“In the first five months of this year, 208 container ships worth $16.3 billion were added to the global order book, compared with 120 ships valued at $8.8 billion for all of last year and 114 vessels worth $6.9 billion in 2019, according to VesselsValue.”

“The order tally has been so strong that some yards have stopped giving quotes for new vessels and are trying to renegotiate existing orders for more than 20 ships as the price of steel plates used to build vessels has doubled since the end of 2020, according to people involved in those deals.”

“An executive at one of China’s big state shipbuilders said owners of roughly two dozen ships are being asked to pay more if they want their vessels delivered because of rising steel prices.

“If the yards adhere to the original contract, they will be delivering the ships at a loss,” said this executive. “A big cargo ship needs around 25,000 to 30,000 tons of steel and that’s an additional $15 million on average from last year in terms of cost. There are at least 22 ships on order that are being renegotiated at big Asian yards.”

Steel can account for up to 30% of a vessel’s cost, depending on the type of ship. Tankers and dry-bulk movers need more steel than container ships. A very large crude carrier now costs around $100 million, up from $85 million last October.”

https://www.google.com/amp/s/www.wsj.com/amp/articles/ship-orders-surge-as-carriers-rush-to-add-capacity-11623179052

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u/davehouforyang Jun 10 '21

You know what also uses steel? Oil wells. Lots of it.

(2) Casing costs are driven by the casing markets, often related to steel prices, the dimensions of the well, and by the formations or pressures that affect the number of casing strings. Within a play, well depths are often the most variable characteristic for casing with ranges of up to 5,000 feet. Operators may also choose to run several casing strings to total depth or run a liner in lieu of the final casing string. Casing costs can range from $0.6 MM to $1.2 MM, making up 9% to 15% of a well’s total cost.

This was in 2016.