September 06, 2008

Japanese shipping firms to buy mega iron ore carriers

Nikkei without citing anyone reported that Japanese Mitsui OSK Lines Ltd, Nippon Yusen KK and Kawasaki Kisen Kaisha Ltd plan to buy 12 giant iron ore carriers for about JPY 60 billion (USD 545.6 million) by 2011.

The news service said that the ships will able to carry about 300,000 tonnes each, exceeding the 170,000 tonnes capacity of standard large bulk carriers. They're also expected to cut fuel costs by about 10% per tonne of iron ore shipped.

The news service added that only nine 300,000 tonnes class bulk carriers are currently operating worldwide, none owned by these three companies. Presently, a few facilities can accommodate the ships including ports in Brazil and select Japanese steelmakers.

Nikkei said that as transport fees and fuel prices surge, shipping companies are trying lower costs by using larger vessels. The amount of iron ore transported by sea is projected to rise about 80% in 2007 from a decade ago because of greater steel production in China and other emerging economies.