Annual Report 2010(PDF/2905)

Sectoral Overview
Eighty-plus percent of the consolidated revenue of the
Shinwa Kaiun Group is from overseas shipping
services, while the coastal shipping services, driven by
our consolidated subsidiaries Shinwa Naiko Kaiun
Kaisha, Ltd. and Shinwa Chemical Tanker Co., Ltd.,
accounts for a little under 20%. The overseas shipping
services comprise Shinwa Kaiun and SHINWA
(SINGAPORE) PTE. LTD., which serve as shipping
operators, Shinwa Marine Corp., which assumes
shipping administration, and overseas owner subsidiaries.
As for businesses other than shipping services, the
Company operates Shinwa Business Management
Kaisha, Ltd., which is engaged in property management
services and entrusted with the administrative and
accounting business of Group members, Shinwa
Systems Co., Ltd., which is engaged in information
systems development and maintenance, and Shinwa
Engineering Services Co., Ltd., which is engaged in
onshore equipment maintenance services.
Operational reviews for overseas shipping
services, coastal shipping services, and other services
for the consolidated fiscal year under review are as
follows.
Overseas Shipping Services
The charter market for Capesize bulk carriers
(170,000-DWT class) was affected by sluggish cargo
movements at the beginning of the fiscal year, due to
production adjustment by steelmakers stemming
from the rapid economic recession following the
Lehman shock. However, average charter rates for
main four routes reached a level surpassing 40,000
U.S. dollars per day because of the recovery of iron
ore imports by China in the second half of the fiscal
year, as well as the recovery of crude steel production
in Japan and Europe, resulting in a gradual increase
in cargo movement and the tightening of supply and
demand for vessels.
In the Panamax bulk carrier (70,000-DWT class)
market, charter rates for the Pacific round service
remained sluggish, at around 10,000 U.S. dollars per
day at the beginning of the fiscal year, because of a
decline in transportation demand for Japan.
However, rates rose to approximately 30,000 U.S.
dollars per day toward the end of the fiscal year
because cargo movements of coal and grain bound
mainly for China and India were increasingly brisk
after summer, and because supply and demand for
vessels tightened, due partly to prolonged ship
congestion in Australia.
In the Handy bulk carrier (30,000-DWT class)
market, charter rates for the Pacific round service
remained sluggish, at approximately 8,000 U.S.
dollars per day in the first half of the fiscal year.
However, cargo movements increased as the world
economy gradually recovered, and the market continued
to show moderate growth. Furthermore, as demand
for vessels notably increased after winter, charter rates
reached a level surpassing approximately 20,000 U.S.
dollars per day at the end of the fiscal year.
While the transport of our main outward cargo,
steel products from Japan to North America, slowed
down, we worked to improve ship-deployment
efficiency through booking combination cargo to
Central and South America, and achieved success.
We maintained stable profits through long-term
contracts for nonferrous ore from the west coast of
South America, one of our main homeward cargos.
In grain transport from the Gulf Coast of the U.S. to
the west coast of South America, we worked to
improve profits through efficient deployment of our
fleet, while benefitting from a market rise.
In near-sea trade using small-sized carriers
(5,000- to 10,000-DWT class), the transport of steel
products bound for China and Southeast Asia
remained at a much higher level than expected, while
demand for the transport of raw materials bound for
Japan was extremely sluggish.
In the field of VLCCs (300,000-DWT-class
tankers), VLGCs (80,000-cubic-meter liquefied gas
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Shinwa Kaiun Group Annual Report 2010