The impact of soaring steel prices on the shipbuilding industry

The establishment of a long-term strategic alliance and credit mechanism between the shipbuilding industry and the steel industry to share benefits and risks is an effective measure to stabilize steel prices. However, this is also a long-term process. What's more, when steel demand is soaring and the market is booming, whether steel companies can resist the temptation of interest and maintain the stability of alliances and mechanisms has to be questioned. The use of futures trading to hedge risks is another effective method. However, this financial activity is complicated to operate and requires a professional team with strong professional capabilities to carry out it. This is not easy for many shipping companies.

In short, the soaring steel price is an unbearable burden for the shipbuilding industry. How to resolve the pressure of the rapid rise in costs brought about by the rapid rise in steel prices is a test of the survival wisdom of shipbuilding enterprises. It is worth mentioning that the shipbuilding industry still needs to pay attention to another major event related to steel prices, that is, the carbon peak of the steel industry. It is reported that the steel industry’s carbon peak-related action plan is being formulated. The steel industry is expected to achieve carbon peak in 2025 and reduce emissions by 30% by 2030, and further deep emission reductions will follow. What impact this will have on the steel industry, the market, and prices is worthy of the shipbuilding industry’s attention and assessment: Does emission reduction mean a reduction in production, and whether the technological transformation investment required for emission reduction will also be reflected in the price of steel? This is all related to the shipbuilding industry. The shipbuilding industry should formulate a plan for this as soon as possible and make relevant preparations.