|
TOKYO—Mitsui O.S.K. Lines Ltd., Japan’s second-largest
shipping line by sales, will exceed its first-half
operating profit forecast by “several billion yen” as it
charges more to transport coal and iron ore.
Daily
charter rates for the company’s largest ships are higher
than forecast, which will help it surpass its estimate
of ¥140 billion, Kenichi Yonetani, a managing executive
officer at Mitsui O.S.K., said in an interview in Tokyo
late Monday.
Mitsui
O.S.K is benefiting from China’s demand for iron ore as
the country builds more cars, ships and factories.
China’s economy grew at the fastest pace in more than a
decade last year and the country’s imports of iron ore
jumped 17 percent, the China Metallurgical Mining
Enterprise Association said in April.
“The
strongest dry-bulk commodities market in history is
extending this run of higher prices,” said Yonetani.
“Operating profit is likely to exceed our expectations.”
Mitsui
O.S.K. rents 22 of its 100 large so-called capesize
vessels at daily rates. It can quickly raise prices for
those ships in response to fluctuations in demand. The
other ships are contracted out for longer periods with
fixed rates.
The
company plans to add 53 iron-ore carrying ships to its
fleet over the next six years, it said Tuesday in a
statement. Mitsui O.S.K. currently operates 125 such
ships and plans to retire some of the older vessels. It
had 364 bulk-commodity ships in its fleet at the end of
March.
The
daily charter rate for a capesize ship was $184,950
Monday, according to figures from the London-based
Baltic Exchange. That’s about 68 percent higher than
Mitsui O.S.K.’s average forecast of $110,000 for the
fiscal year started April 1.
Mitsui
O.S.K. forecasts net income to rise 20 percent to ¥104
billion in the fiscal first half ending September 30, as
sales increase 7.4 percent to ¥1.01 trillion.
Higher-than-expected prices for transporting oil will
also boost profits, Yonetani said.
The cost
of shipping crude oil from the
Middle East to
Asia, the busiest route for supertankers, has soared as the use
of ships for storage is trimming vessel supply.
A Baltic
Exchange composite index of rates for transporting oil
to Japan from the Middle East was 205.54 Monday, almost
double Mitsui O.S.K.’s prediction of 110 for this fiscal
year. The shipping line rents 10 percent of its fleet of
35 very large crude carriers, or VLCCs.
“The
tanker market has improved,” said Yonetani. “Tanker
rates will help boost profits this fiscal half.”
(Bloomberg) |
