After a run of weak growth in crude oil demand
Japan’s three leading shipping companies are getting rid of 10 percent of their supertankers after a run of weak growth in crude oil demand that has undercut freight rates, the Nikkei reported.
Nippon Yusen KK, Kawasaki Kisen Kaisha Ltd and Mitsui O.S.K. Lines Ltd are reducing their very large crude carriers (VLCCs) from 90 to 82, the business daily said.
The VLCCs measure upwards of 330 meters in length, carry about 300,000 tons of crude, and cost around 10 billion yen ($128.29 million), the Nikkei said.
Nippon Yusen has sold three of its 39 VLCCs to a Greek shipping company, each for about $37 million, the daily said.
Kawasaki Kisen has sold one of its nine VLCCs to a South Korean firm for $37 million and Mitsui O.S.K. is considering disposing three of its 42 VLCCs by March, the Nikkei reported.
VLCCs numbered 570 worldwide at the end of September, about 70 more than in 2007, making for about 17 percent increase in shipping capacity, according to shipping research firm Tramp Data Service Co, the paper said.
But global crude oil demand grew less than 4 percent during this time, creating a capacity glut, the Nikkei reported.
Supertanker freight rates between the Middle East and East Asia are down to only about a quarter of the peak they hit in July 2008, the daily said.
Nippon Yusen, Kawasaki Kisen and Mitsui O.S.K. are all expected to book net losses for the current fiscal year, the Nikkei said. ($1 = 77.9500 Japanese yen)
Source: Reuters