Japan's JFE Steel charters LNG-fuelled Capesize vessels
Posted on 21 July 2021
Japanese steel mill JFE Steel has signed long-term charter agreements with Japanese shipping firms for three LNG-fuelled Capesize bulk carriers to transport iron ore and coal for a targeted commissioning starting in early 2024.
JFE Steel said today it has agreed with shipping firms K Line, Mitsui OSK Lines (Mol) and NYK Lines to charter an LNG-fuelled Capesize vessel each. The three 210,000 deadweight tonne (dwt) bulk carriers are being designed and built by Japanese shipbuilder Nihon Shipyard, a joint venture set up by Imabari Shipbuilding and Japan Marine United.
The company is planning a gradual shift of its fleet to LNG-fuelled vessels in efforts to reduce shipping emissions. The company will also consider deployment of zero-emissions vessels in the long term, such as those powered by ammonia and synthetic methane, as part of efforts to decarbonise its steel making operations by 2050.
JFE Steel is joining a move by global steel and mining firms to shift to more environmentally-friendly shipping logistics. The 180,000dwt LNG-fuelled bulk carrier HL Green was commissioned earlier this year for delivery of iron ore and coal to South Korean steel producer Posco. UK Australian resources firms BHP and Rio Tinto have also entered a newbuild LNG-fuelled bulker agreement with Singapore-based Eastern Pacific Shipping.
JFE Steel plans to produce 26.5mn t of crude steel during the April 2021-March 2022 fiscal year. The company is operating eight blast furnaces (BF), consisting of one each at Chiba and Kawasaki in east Japan and three each in Kurashiki and Fukuyama in west Japan. The at Kawasaki BF is planned to be closed by April 2024 under the firm's structural reforms.
K Line said it is expecting to commission a newbuild LNG-fuelled Capesize vessel for JFE Steel during the first half of 2024. The new vessel is expected to achieve a 40pc energy efficiency design index (EEDI) reduction, topping the International Maritime Organisation's 30pc EEDI phase 3 reduction requirement for bulk carriers after 2025. It will also be installed with an automated kite system Seawing, aimed to effectively utilise wind power and further cut shipping emissions.
Seawing is being developed by Airseas, an industrial firm spun off from aircraft manufacturer Airbus. K Line and Airseas have been co-operating on the technology's application on bulk carriers after receiving approval in principle from Japanese classification society ClassNK last year.
Mol is targeting to commission its new LNG-fuelled Capesize bulk carrier in January 2025 under the charter deal with JFE Steel. The company has a plan to expand the LNG-powered vessels fleet to 90 by 2030. It is expected to commission its first LNG-fuelled ocean-going vessel in 2023.