Although shipowners have much to say about newbuilding prices when they order ships, they only burden about 16% of overall costs.
In terms of VLCC, its newbuilding price takes just 16% of overall costs for owner - 10% accounts for newbuilding price (equals total depreciation expenses) and 6% for interest cost in line with newbuilding price, said shipbuilding-specialized analyst Lee Sok-Je.
On the other hand, fuel cost takes about 46%, which almost trebles total amount of ship investment (depreciation expense + interest cost).
In case of high-speed containerships, proportion of fuel cost increases. Moreover, quality of ships has an influence on miscellaneous costs (other operating cost accounts for 32% and maintenance cost for 6%).
Lee said, "When shipowners say Korean newbuildings are not affordable to buy, it is not completely true. If fuel cost can be reduced by 10%, about 20% higher newbuilding price is quite acceptable. They just don't say it out loud."
Also, Korean shipyards should play a bargaining chip, which is that Korean ships are more actively traded in secondhand market in higher price, during a negotiation.