Trend War-driven costs and AI demand push product prices up, tempered by Chinese oversupply

Summary

KIET expects upward pressure to dominate product prices across Korea's key industries in 2026. Higher raw material and logistics costs from Middle East geopolitical risk combine with demand concentrated on AI and high-value products. Oil product export prices stay high as crude prices and refining margins rise and Middle East risk keeps supply unstable. Newbuilding ship prices remain high on transport disruption and rising material and labour costs, and ample order backlogs limit the chance of a decline. Battery prices climb gently on higher lithium and nickel prices and recovering ESS and EV demand, although cheap Chinese LFP batteries soften the rise. Chinese oversupply and intense global competition cap the size of price increases in some industries.