Forecasting shipbuilding demand using shipping market modeling: A case study of LNGC

Abstract

Volatile and cyclical shipbuilding demand has consistently been a risk for the shipbuilding industry. This study analyzes the shipping market from a macro perspective and proposes a model capable of long-term shipbuilding demand forecasting. Initially, a system dynamics model representing the shipping market based on maritime economy theory is presented, comprising five main components: external variables, the freight market, shipyards, fleet productivity, and demolition. Based on this system dynamics model, a case study was conducted using LNG carrier market data. The prediction results of the model were compared with seven other time series forecasting models, demonstrating its validity. Finally, scenario analyses evaluated the impact of changes in cargo transport demand, shipyard supply capacity, and carbon regulations. The findings indicated that while increases in transport demand and stricter regulations enhance the amplitude of the shipbuilding demand cycle, increased shipyard supply capacity mitigates these cycles, raising both the period and trough of the cycle.