Japan’s largest steel producing company, Nippon Steel & Sumitomo Metal Corp (NSSMC), is about to add nine newbuild Capesizes to its fleet, according to a weekly report by shipbroker Compass Maritime.
As informed, the steel producer plans to charter nine Very Large Ore Carriers (VLOCs) pertaining to the 240-250,000 DWT size for 8-15 years from four large Japanese shipowning groups that intend to order the vessels at Namura Shipbuilding and Imabari Shipbuilding.
It was reported that NSSMC will take three vessels from Mitsui OSK Lines and two each from NS United, K Line, and NYK. The vessels are expected for delivery in 2018 and 2019.
“This will add another two million tons of capacity to the already saturated Cape and VLOC market and follows on the heels of recent reports regarding COSCO’s new order for a large number of 400,000 DWT Valemax bulkers from Chinese yards,” Compass Maritime said.
The broker believes that the only saving grace for the Cape market has been the record pace of Cape bulker recycling, as in 2015 up to 72 ships were sent for scrap, and “ that may be light number as the ships sold to Chinese breakers under their subsidy system, which has now been extended and will expire in 2017, sometimes go unreported.”
The dry bulk shipping market is expected to remain in recession due to contracting demand for iron ore and coal, and any recovery is not expected until 2017, according to shipping consultancy Drewry .
As for the remainder of this year, Drewry expects slippage rates to remain high continuing into next year as well, thus keeping a lid on any fleet growth in 2015.