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MOL trims fleet in face of lower demand

Japan – As a result of this year’€™s ‘€˜worsening market trends’€™, the Japanese operator of the world’€™s largest merchant fleet – Mitsui OSK Lines (MOL) – is intending to scrap or cold-lay-up between 10 and 20 of its Capesize bulkers. Initially, just five vessels were scheduled for dismantling by next March but the number has been increased as MOL aims to rejuvenate its fleet.

The Tokyo-based company witnessed a steep decline in shipping rates throughout 2011, resulting in a US$ 327 million net loss – its first deficit since 1995. Given that MOL acquires approximately half of its revenue through bulk shipping, it hopes that trimming the fleet ‘€˜will help restore an appropriate vessel supply-demand balance in the future’€™.

MOL spokesman Makoto Arai told Bloomberg Businessweek: ‘€˜The market situation is very tough, so we will lay up vessels along with the market trend.’€™ This is simultaneously meant to reduce the average age of the fleet from 23 down to 15 years.

According to GMS, an American cash buyer of ships for recycling, MOL has already offloaded its 180 972-dwt Capesize bulker Niitaka Maru, built in 1988. The vessel was reportedly sold for just under US$ 8 million and is currently making its way to an unknown ‘€˜green’€™ shipyard in China.

Another vessel, the 44 760-dwt woodchip carrier Raku Yoh, built in 1992, is also reported to have been sold to another Chinese scrapping facility for roughly US$ 3.5 million.

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