Deteriorating Ocean-Shipping Market Conditions and Excess Tonnage

「海運市況は、イランを巡る中東情勢の緊迫化、紅海・スエズ運河周辺の航行リスク、中国経済や主要国の通商政策、新造船竣工による船腹量増加などが交錯し、不透明な状況となりました。」

「While LPG/LNG time-charter market conditions remained firm, LNG time-charter market conditions were depressed by excess vessel capacity. However, market conditions rose sharply as the deterioration of the situation in the Strait of Hormuz in 2026 accelerated a shift to US-loading cargoes.」

「Gas carrier market conditions, including LPG/LNG carriers, differed significantly. LPG carriers remained firm on strong energy demand in Europe and Asia, while LNG cargo movements faced excess vessel capacity because of delays to large export projects, and LNG time-charter market conditions remained at historically low levels.」

「Demand for LPG/LNG carriers varied during the period. LPG carriers showed volatile conditions, including a temporary rise to a historical high in the first half of 2024 followed by a sharp decline. For LNG carriers, delays to LNG production projects worldwide caused excess vessel supply, and the resulting market downturn is expected to continue for the time being.」

「Crude oil tanker market conditions remained relatively high as the situation in Ukraine and tensions in the Middle East supported demand for vessels, but volatility remained high and conditions continued to be unstable.」

「Large tanker time-charter market conditions were volatile because of the continuing impact of the situation in Ukraine, worsening conditions in the Middle East since October of the previous year, and the resulting avoidance by many shipping companies of transit through the Suez Canal and Red Sea. However, market conditions remained generally high throughout the year, partly because newbuilding supply was relatively limited.」

「During the cumulative third quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that management recognizes could materially affect the financial position, operating results and cash flows of the consolidated companies, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「For crude oil tankers, demand for vessels continued to benefit from changes in trade patterns resulting from the situation in Ukraine, while the surplus-vessel environment that had been the main cause of the market downturn improved. However, even slight changes in trade patterns came to have a significant impact at times on vessel capacity and transportation demand, and conditions remained high but unstable.」

「During the three months ended the first quarter of the current fiscal year, there were no occurrences of major risks that management recognized as potentially having a material impact on the financial position, operating results or cash flows of the consolidated companies among those relating to the business and accounting conditions described in the quarterly report, and no significant changes to the "Business and Other Risks" described in the annual securities report for the previous fiscal year. There were also no significant events or other matters.」

「Large tanker time-charter market conditions were generally firm. The impact of reduced cargo movements caused by the easing of global crude oil supply and demand due to the COVID-19 pandemic continued from the previous fiscal year, but from July onward, increased demand for vessels resulting from changes in trade patterns caused by the situation in Ukraine more than offset the negative pandemic-related factors.」

「During the cumulative third quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that management recognizes could materially affect the financial position, operating results and cash flows of the consolidated companies, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「Tanker time-charter market conditions remained depressed from the beginning of the year because of an imbalance between vessel supply and demand, although crude oil tankers saw a temporary rise in March due to the situation in Ukraine. However, conditions improved rapidly from July onward as cargo movements became more active.」

「During the three-month period ended 30 June, there were no new risks that management recognizes as having the potential to materially affect the financial position, operating results or cash flows of the consolidated companies, and no material changes to the business risks described in the annual securities report for the previous fiscal year.」

「The large tanker market remained well below generally accepted break-even levels throughout the year, as declining cargo movements caused by the global decrease in crude oil demand during the COVID-19 pandemic, together with excess vessel capacity resulting from a slowdown in scrapping, further depressed market conditions. By contrast, cargo movements for LPG/LNG carriers became active because of increased demand and widening regional differences in cargo prices, and market conditions remained generally firm throughout the period.」

「During the nine months ended the third quarter of the current fiscal year, there were no occurrences of matters that could have a material impact on investors' decisions among those relating to the business and accounting conditions described in the quarterly report, and no significant changes to the "Business and Other Risks" described in the annual securities report for the previous fiscal year. There were also no significant events or other matters.」

「In our ocean shipping segment, tanker market conditions remained difficult, while other markets continued to recover.」

「During the first quarter of the current consolidated cumulative period, there were no occurrences of matters that could materially affect investors’ investment decisions among the matters relating to the business and financial position described in this quarterly report, nor were there any material changes to the “Business and Other Risks” described in the annual securities report for the previous fiscal year.」

「During the cumulative third quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that could materially affect investors’ decisions, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「The car carrier market was severely affected by the COVID-19 pandemic, and during the first half, nearly half of the world's car carrier fleet was forced to voluntarily suspend operations, entering what is commonly known as lay-up.」

「During the first quarter of the current consolidated cumulative period, there were no occurrences of matters that could materially affect investors’ investment decisions among the matters relating to the business and financial position described in this quarterly report, nor were there any material changes to the “Business and Other Risks” described in the annual securities report for the previous fiscal year.」

「Container ship market conditions varied by region, with cargo movements on North American routes remaining sluggish through December while supply and demand on European routes improved. However, the spread of COVID-19 further depressed the market, resulting in historically high levels of laid-up vessel capacity.」

「During the cumulative third quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that could materially affect investors’ decisions, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「Against this economic backdrop, signs of recovery in time-charter market conditions were seen across most vessel types in the ocean shipping industry. Tanker market conditions were weak from April through June because of seasonal factors, but subsequently remained above the level of the same period of the previous year and reached the level regarded as the break-even point in August. Reduced vessel supply and increased demand resulting from geopolitical conditions, particularly in oil-producing countries, supported market conditions. The Capesize bulk carrier market temporarily declined during the summer but recovered to levels substantially above those of the past three years. Small and mid-sized vessel types also rose steadily, albeit more gradually than Capesize vessels, as supply and demand conditions improved. The car carrier market was sluggish but stable, as cargo movements, particularly from Europe to Asia, had been declining since the beginning of the year and the market was experiencing excess vessel supply. The container ship market remained stable across vessel types, but the full-scale deployment of ultra-large vessels was under way, creating a situation in which the future supply-and-demand balance remained uncertain.」

「During the first quarter of the current consolidated cumulative period, there were no occurrences of matters that could materially affect investors’ investment decisions among the matters relating to the business and financial position described in this quarterly report, nor were there any material changes to the “Business and Other Risks” described in the annual securities report for the previous fiscal year.」

「The large tanker market remained weak from the beginning of the year, as it had the previous year, and fell to record-low levels around May. However, in addition to progress in scrapping older vessels during the first half, seasonal growth in demand led to a rapid recovery in winter.」

「During the cumulative third quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that could materially affect investors’ decisions, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「The large tanker market remained weak from the beginning of the year, as it had the previous year, and temporarily fell in May to levels below the previous year's record low. At the same time, a record number of tanker scrappings, centered on VLCCs, was reported, while pressure from newbuilding supply eased. Vessel supply and demand is therefore expected to gradually improve. Conditions in the bulk carrier market differed by vessel type. Although the Capesize market temporarily fell to extremely low levels in March, it subsequently recovered sharply and returned to levels generally above those of the past three years.」

「During the first quarter of the current consolidated cumulative period, there were no occurrences of matters that could materially affect investors’ investment decisions among the matters relating to the business and financial position described in this quarterly report, nor were there any material changes to the “Business and Other Risks” described in the annual securities report for the previous fiscal year.」

「The bulk carrier market improved substantially from the previous year's record-low levels, and all vessel types reached their highest levels since 2014 during the October-December peak season, with Capesize rates temporarily reaching a daily time-charter rate of $30,000.」

「The bulk carrier market rose across all vessel types from July onward. In the Capesize market, firm cargo movements of iron ore and coal provided a positive impetus, and rates reached a four-year high for this normally slack period. Other vessel types also rose on increased coal shipments to China and the start of the autumn grain harvest season.」

「There have been no material changes to the “Business and Other Risks” described in the annual securities report for the previous fiscal year.」

「The bulk carrier market reached record lows across all vessel types in February 2016, while the Baltic Dry Index (BDI) also hit a record low for the first time in approximately 30 years, since July 1986. Although excess vessel capacity had not yet been eliminated, cargo movements gradually increased from spring onward, scrapping of older vessels remained active, and market conditions began to recover gradually. Conditions had not yet reached a healthy level, but the pace of improvement accelerated in March 2017, indicating progress in a favorable direction.」

「There have been no material changes to the “Business and Other Risks” described in the annual securities report for the previous fiscal year.」

「Under these economic conditions, deep-sea shipping markets remained challenging, as exemplified by the bankruptcy of a major South Korean operator. The market for large LPG carriers also softened. Although cargo movements remained firm, the large number of newbuildings delivered had a significant impact, and the market recorded its lowest level since the Lehman shock. The dry bulk market continued to record historically low levels across all vessel types, and the Baltic shipping index reached a new record low for the first time in approximately 30 years, since July 1986.」