This chapter deals with the estimation of ship’s building costBuilding costs for the needs of preliminary designPreliminary design, in which ship’s main dimensions and other characteristics need to be determined, taking into account a given transport capacityTransport Capacity and speed in accordance to the requirements of an interested shipowner. As the preliminary designPreliminary design procedure is inherently an optimization procedure of ship’s main characteristics, we need to define first the optimization problem in hand and its relationship to shipbuilding cost. We proceed then with an analysis of ship’s building costBuilding costs and of methods of how to estimate its main components. The volatility of the shipbuilding cost and its fundamental difference to ship’s market prices are highlighted. The estimation of the shipbuilding cost is of importance both for the shipyard offering a shipbuilding price to an interested shipowner and for the shipowner as a basis for rational decision-making. The complexity of developing rational cost estimation methods for shipbuilding is elaborated in a recent literature review paper by Alblas and Pruijn (Int Shipbuild Prog 71:3–28, 2024).