Mitsui O.S.K., NYK to cut capacity after forecasting losses
Mitsui O.S.K. Lines Ltd. and Nippon Yusen K.K., Japan’s largest shipping lines, said they will cut container services capacity after reversing profit forecasts for this fiscal year to net losses. The shares fell, Bloomberg reports. Mitsui O.S.K. will reduce frequency on container routes as it expects a net loss of 4 billion yen ($51 million) for the year ending March 31, compared with a previous prediction of a 17 billion yen profit, the Tokyo-based company said in a statement today. Nippon Yusen, or NYK, expects an 18 billion yen net loss, compared with an earlier estimate of 5 billion yen in net income.
The shipping lines are trimming container services capacity after a surge in supply of vessels pushed down rates. Global container-shipping trade fell 1 percent in August, normally the peak month for transporting boxes, from the prior month, the worst performance in at least 11 years, Macquarie Capital (Europe) Ltd. said earlier this month.
Mitsui O.S.K. dropped 4.4 percent, the biggest intraday decline since Oct. 5, to 307 yen as of 12:50 p.m. in Tokyo trading. NYK dropped 2.9 percent to 200 yen.
NYK cited higher fuel prices, the strengthening yen and a reduction in demand for shipping caused by the floods in Thailand as weighing on earnings in addition to the ship glut.
Container vessels with capacity to haul more than 1 million 20-foot boxes may need to be idled or laid up because of overcapacity in the industry, The Baltic and International Maritime Council, a shipping trade group, said earlier this month.
Kawasaki Net Loss
Kawasaki Kisen Kaisha Ltd., Japan’s third-largest shipping line, expects a net loss of 32 billion yen in the year ending March 31, compared with an earlier loss forecast of 30 billion yen, the Tokyo-based company said in a statement today.
Kawasaki Kisen shares declined 2.4 percent to 162 yen.
Japanese shipping line revenue has also been hurt since March as Japan’s largest earthquake on record, and ensuing tsunami, damaged car factories and led to the biggest tumble in vehicle exports on record.
Vehicle exports dropped 3 percent in July, compared with a year earlier, following a 68 percent slump in April, the biggest drop since the Japan Automobile Manufacturers Association began keeping figures on them in 1973.
The yen gained 4.5 percent against the dollar last quarter to 77.06. It touched a post-World War II record of 75.35 today in Tokyo and traded at 79.20 as of 12:54 p.m. in Tokyo.
Higher fuel prices are also increasing costs for shipping lines. The price of 380 Centistoke marine bunker fuel, used by ships, traded at $698.50 a metric ton in Singapore on Oct. 28, a more than three year high.
The Baltic Dry Index, a measure of commodity-shipping prices has dropped 24 percent in the past year to 2,018 points, as of Oct. 28 in London.
The shipping lines are trimming container services capacity after a surge in supply of vessels pushed down rates. Global container-shipping trade fell 1 percent in August, normally the peak month for transporting boxes, from the prior month, the worst performance in at least 11 years, Macquarie Capital (Europe) Ltd. said earlier this month.
Mitsui O.S.K. dropped 4.4 percent, the biggest intraday decline since Oct. 5, to 307 yen as of 12:50 p.m. in Tokyo trading. NYK dropped 2.9 percent to 200 yen.
NYK cited higher fuel prices, the strengthening yen and a reduction in demand for shipping caused by the floods in Thailand as weighing on earnings in addition to the ship glut.
Container vessels with capacity to haul more than 1 million 20-foot boxes may need to be idled or laid up because of overcapacity in the industry, The Baltic and International Maritime Council, a shipping trade group, said earlier this month.
Kawasaki Net Loss
Kawasaki Kisen Kaisha Ltd., Japan’s third-largest shipping line, expects a net loss of 32 billion yen in the year ending March 31, compared with an earlier loss forecast of 30 billion yen, the Tokyo-based company said in a statement today.
Kawasaki Kisen shares declined 2.4 percent to 162 yen.
Japanese shipping line revenue has also been hurt since March as Japan’s largest earthquake on record, and ensuing tsunami, damaged car factories and led to the biggest tumble in vehicle exports on record.
Vehicle exports dropped 3 percent in July, compared with a year earlier, following a 68 percent slump in April, the biggest drop since the Japan Automobile Manufacturers Association began keeping figures on them in 1973.
The yen gained 4.5 percent against the dollar last quarter to 77.06. It touched a post-World War II record of 75.35 today in Tokyo and traded at 79.20 as of 12:54 p.m. in Tokyo.
Higher fuel prices are also increasing costs for shipping lines. The price of 380 Centistoke marine bunker fuel, used by ships, traded at $698.50 a metric ton in Singapore on Oct. 28, a more than three year high.
The Baltic Dry Index, a measure of commodity-shipping prices has dropped 24 percent in the past year to 2,018 points, as of Oct. 28 in London.