As the end of the Middle East conflict appears imminent, analysts predict that the previously soaring prices of oil and raw materials may soon be reflected in industrial costs.
Some costs may be passed on to product prices with a delay, and even if shipping through the Strait of Hormuz resumes, lingering issues such as vessel wait times, detours, and inventory burdens could persist.
According to industry sources on June 15, major domestic manufacturers are closely monitoring the pace of normalization in shipping and the timing of transportation cost reductions following the peace agreement. The Strait of Hormuz is a critical route for transporting crude oil and liquefied natural gas (LNG). During the conflict, blockades and shipping restrictions heightened energy procurement uncertainties, leading to increased cost pressures across various sectors, including refining, petrochemicals, steel, automotive, and electronics.
The refining and petrochemical industries have been the most directly affected. With increased volatility in crude oil, LNG, and naphtha prices, some companies have shouldered the costs of securing inventory and alternative procurement. Even if oil prices stabilize, the high costs of already acquired raw materials and adjustments to long-term shipping contracts may continue to pose challenges for some time.
The steel and non-ferrous metal industries have also faced rising energy costs. Electricity and fuel expenses constitute a significant portion of operations for electric arc furnaces and blast furnaces. The rise in raw material prices and shipping delays during the conflict has already impacted product pricing and delivery schedules, making price negotiations with clients inevitable during subsequent contract adjustments.
For the automotive sector, the speed of logistics normalization is crucial. Finished vehicles and parts move between global production bases and sales networks. The risks associated with the Strait of Hormuz have restricted maritime transport and increased insurance costs, adding pressure to shipments bound for the Middle East and logistics routes to Europe and Asia. While the normalization of shipping is a positive development, a sudden influx of delayed shipments could create short-term bottlenecks.
The electronics and semiconductor industries experienced minimal direct impact but could not escape the logistical burdens associated with equipment and materials. Although semiconductors do not directly use crude oil as a raw material, timely delivery of advanced equipment, components, specialty gases, and chemical materials is essential to avoid production disruptions. The rise in shipping and air freight costs during the conflict has also increased the burden of managing new investments and maintenance schedules.
A key challenge for the industry is the restructuring of supply chains. This conflict has demonstrated that blockages in specific straits or routes can disrupt not only crude oil and LNG supplies but also the procurement of materials, components, and equipment. Companies need to reassess their reliance on Middle Eastern raw materials and logistics routes and develop new inventory standards and alternative procurement lines.
An industry representative stated, "While the peace agreement is a positive development, the transportation delays and cost burdens incurred during the conflict will not disappear overnight. Moving forward, stabilizing costs and diversifying supply chains away from specific routes and countries will become increasingly important."
* This article has been translated by AI.
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