Mitsui O.S.K. Lines Sees Strong Capesize Dry Bulk Demand

Dry Bulk Market, International Shipping News | 08/08/2026

Financial Highlights: First Quarter Ended June 30, 2026

Mitsui O.S.K. Lines said its crude oil tanker market improved as the supply-demand balance tightened, supported by higher ton-miles from alternative procurement of Middle Eastern cargoes and reduced effective vessel supply after the deterioration of the situation in the Middle East and the de facto closure of the Strait of Hormuz. Market conditions remained above the level of the previous fiscal year.

In the LPG carrier market, the supply-demand balance also tightened, driven by a shift in demand toward North American cargoes after disruptions to loadings from the Middle East, as well as congestion in the Panama Canal. Market conditions likewise remained above the previous fiscal year.

As a result, the Tanker Business posted higher profit than in the previous fiscal year.

The FPSO business continued to generate stable profit from existing long-term charter contracts. Profit also increased year on year, supported by steady progress in FPSO construction projects at MODEC, Inc., an equity-method affiliate.

By contrast, the LNG and Ethane Carrier Business reported lower profit than a year earlier because the previous fiscal year included a one-time gain from the refinancing of an existing project. The Gas Infrastructure Business also recorded a decline, partly due to contract terminations. As a result, the Energy Business posted lower profit year on year.

Chemical Logistics Business

In the Methanol Tanker and Product Tanker businesses, earnings increased as Waterfront Shipping Limited, an equity-method affiliate of the company, continued to perform strongly. In addition, the worsening situation in the Middle East increased cargoes loading in the United States, temporarily tightening vessel supply and demand and supporting firm market conditions.

In the Chemical Tanker Business, cargo volumes from individual loading ports fluctuated because of the impact of U.S. tariffs and the situation in the Middle East. Even so, earnings improved as freight rates rose from April onward, reflecting better market conditions for U.S. Gulf loadings. Earnings also increased year on year because of the change in the fiscal year-end of the company’s consolidated subsidiary MOL Chemical Tankers Pte. Ltd., which resulted in a six-month accounting period from January 1 to June 30, 2026.

In the Tank Terminal Business, goodwill amortization and other expenses related to the acquisition of shares in LBC Tank Terminals Group Holding Netherlands Coöperatief U.A. continued, but performance remained stable. The business benefited from stronger U.S. export demand for petroleum products and chemicals after tensions in the Middle East escalated.

Product Transport Business

In the Containership Business, freight rates increased from May onward amid strong cargo demand, especially on routes from Asia to North America and Europe. However, Ocean Network Express Pte. Ltd., an equity-method affiliate, reported lower profit than in the previous fiscal year because of higher fuel costs stemming from tensions in the Middle East.

Handling volumes at domestic container terminals remained broadly firm.

Vehicle transport demand remained solid, but profit declined from the previous fiscal year. Mitsui O.S.K. Lines cited the suspension of vessel deployments to Persian Gulf routes after the closure of the Strait of Hormuz, higher fuel costs, and vessel deployment restrictions caused by congestion at some ports.

In the overseas container terminal business, higher fuel costs from Middle East tensions weighed on results, but handling volumes remained firm. Vietnam’s import and export cargo volumes increased as some supply chains shifted there amid U.S.-China trade friction.

In the Logistics Business, the impact of Middle East tensions on supply chains continued, and air and ocean cargo volumes were lower than in the previous fiscal year. Overall, the Product Transport Business recorded lower profit year on year.

Wellbeing \u0026 Lifestyle Business

Daibiru Corporation, the core of the group’s real estate business, reported higher profit than in the previous fiscal year. The result was supported by solid performance from its office and commercial building portfolio and contributions from newly acquired properties, including Capital House and Warwick Court in the United Kingdom.

At MOL Sunflower Ltd., profit declined from the same period a year earlier because rough weather reduced sailings, cargo volumes weakened amid sluggish cargo conditions, and fuel costs rose.

At MOL Cruises, Ltd., profit also fell year on year, as it has taken time to capture demand for MITSUI OCEAN FUJI. Even so, the Wellbeing \u0026 Lifestyle Business as a whole posted higher profit than in the previous fiscal year.

Other Businesses

The tugboat business recorded higher profit than in the previous fiscal year, supported by firm operations. Other businesses, including ship operation, ship management, and financing, also posted higher profit.

FY2026 Outlook

Mitsui O.S.K. Lines said there was no change to its current forecast from the revision announced on August 3, 2026, in the release titled “Notice of Revisions in Financial Forecasts for Fiscal Year Ending March 2027.”

The company said its outlook for each segment is based on several assumptions. In the Persian Gulf, westbound and eastbound navigation is expected to resume around October 2026, albeit on a limited number of routes, with conditions expected to return to pre-conflict levels around January 2027. Navigation in the Red Sea is expected to remain unavailable throughout the fiscal year.

Dry Bulk Business

For Capesize bulkers, cargo movements are expected to remain firm, supported by iron ore shipments from Western Australia and Brazil, as well as bauxite and iron ore from West Africa. New vessel completions are expected to remain limited, which should keep market conditions firm. That matters because Capesize routes are highly exposed to long-haul ore flows, so changes in mining exports and fleet supply can quickly shape freight availability.

For Panamax and smaller bulkers, the market is also expected to remain firm, supported by steady movements of coal, grain, and steel products. The company noted concerns about possible effects from the Middle East situation and congestion in the Panama Canal.

In the open-hatch vessel business, transport demand for pulp and project cargo is expected to remain strong. The Dry Bulk Business therefore expects higher profit compared with the previous forecast.

Energy Business

For crude oil tankers, ton-miles are expected to stay at high levels as alternative procurement from North and South America and other regions continues amid instability in the Middle East. Although market conditions are expected to gradually normalize if the Middle East situation eases and new vessel deliveries increase effective supply, they are expected to remain firm.

For LPG carriers, the shift in demand toward North American cargoes is also expected to continue, keeping ton-miles high. Continued congestion in the Panama Canal is expected to support tight supply-demand conditions, and market conditions are expected to remain firm.

The Offshore Business is expected to continue generating stable profit from existing long-term charter contracts.

The LNG and Ethane Carrier Business is expected to maintain stable profit through existing long-term charter contracts and the start of new contracts.

The Gas Infrastructure Business expects earnings to remain in line with the previous forecast, supported by the stable operation of existing projects.

Overall, the Energy Business expects higher profit than in the previous forecast.

Chemical Logistics Business

In the Product Tanker Business, market conditions are expected to remain uncertain because of continued instability in the Middle East, but performance is expected to stay firm, supported by medium-term contracts.

In the Methanol Tanker Business, stable earnings are expected to continue under existing long-term charter contracts.

In the Chemical Tanker Business, route restrictions and other effects from the worsening Middle East situation are expected to continue, but profit is projected to exceed the previous forecast, supported by improved market conditions for U.S. exports, where demand has increased as an alternative route.

In the Tank Terminal Business, goodwill amortization related to the acquisition of shares in LBC Tank Terminals Group Holding Netherlands Coöperatief U.A. will continue, but performance is expected to remain stable on the back of strong storage demand and existing long-term customer contracts.

The Chemical Logistics Business is expected to record higher profit than in the previous forecast.

Product Transport Business

In the Containership Business, high fuel costs are expected to continue because of instability linked to Middle East tensions, but profit is expected to increase from the previous forecast thanks to higher freight rates supported by strong cargo demand. Handling volumes at domestic container terminals are expected to remain firm.

In the Vehicle Transport Business, the closure of the Strait of Hormuz is expected to affect vessel deployment plans. The company said it will closely monitor automobile sales and political and economic conditions and will adjust vessel deployment flexibly to meet firm transport demand.

In the overseas container terminal business, Mitsui O.S.K. Lines plans to continue transferring shares in the remaining terminal companies. Although high fuel costs from Middle East tensions are expected to weigh on profit, earnings are still expected to improve from the previous forecast, supported by firm handling volumes.

In the Logistics Business, geopolitical risks, including Middle East tensions, and delays in the recovery of demand in some overseas regions are expected to continue. The company said it will work to improve results by passing on higher costs stemming from commodity and fuel price fluctuations.

The Product Transport Business is expected to post higher profit than in the previous forecast.

Wellbeing \u0026 Lifestyle Business

In the Real Property Business, Daibiru Corporation is expected to continue generating solid profit from its existing portfolio of office and commercial buildings, along with contributions from properties acquired in the previous fiscal year, including Capital House and Warwick Court in the United Kingdom, the completion of Atrium Place in India, and capital gain investments in Japan and overseas.

The ferry and coastal RoRo ship businesses are expected to secure a certain level of profit, supported by steady domestic cargo and passenger demand. Although higher fuel costs related to Middle East tensions are temporarily affecting earnings, the company said it will continue working to improve performance by appropriately reflecting fuel cost changes in freight rates and other charges while monitoring demand trends.

The Cruise Business remains in a transition from a one-vessel to a two-vessel operation. Marketing and sales promotion efforts are taking time, and profits are expected to fall below the previous forecast.

The Wellbeing \u0026 Lifestyle Business as a whole is expected to record lower profit than in the previous forecast.

Associated Businesses

Associated businesses, including the tugboat and trading businesses, are expected to secure firm earnings and post higher profit than in the previous forecast.

Financial Position

As of June 30, 2026, total assets increased by ¥240.1 billion from the end of the previous fiscal year to ¥6,202.4 billion, mainly due to an increase in vessels.

Total liabilities rose by ¥133.2 billion to ¥3,166.4 billion, mainly because of higher long-term bank loans.

Total net assets increased by ¥106.8 billion to ¥3,035.9 billion, mainly because of an increase in foreign currency translation adjustments.

As a result, the shareholders’ equity ratio fell by 0.2 percentage points from the end of the previous fiscal year to 48.0%.

Source: Mitsui O.S.K. Lines tweet