Nippon Steel, China Steel to Start Combination Transport

Nippon Steel announced on Friday the firm agreed with China Steel Corporation of Taiwan for combination ocean transport of raw materials to improve the transport efficiency starting April. China Steel import limestone from Japan using vessel held by Nippon Steel Shipping, which is Nippon Steel’s subsidiary, and the vessel transport coal from Indonesia and Vietnam for Nippon Steel. Nippon Steel, which has experience the combination transport with mineral majors, tries to improve the cost competitiveness under higher ocean freight. Nippon Steel imports around 2 million tonnes per year of thermal coal and anthracite and China Steel imports 600,000-700,000 tonnes of limestone from Kochi. Their vessels are empty during return voyage. With the combination transport, they can reduce empty voyage. They hire Nippon Steel Shipping’s 70,000 dead weight tonne of panamax bulker as a year contract of affreightment. The vessel has 4 round of shipping to transport total 200,000 tonnes per year of limestone and coal each for China Steel and Nippon Steel. Nippon Steel already has experience for combination transport with Rio Tinto and BHP Billiton. Nippon Steel also studies potential joint transport with CVRD, with which Nippon Steel announced strategic alliance in December to reduce ocean freight cost for raw materials transport. Nippon Steel imports annual 80 million tonnes of coal and iron ore.