Japanese shipowner Mitsui OSK Lines (MOL) is joining forces with Cyprus-based dry bulk specialist SMT Shipping to jointly explore options for shipping direct reduced iron (DRI).
Interest in DRI produced by reducing iron ore with natural gas or hydrogen is developing as the steel sector ramps up attempts to reduce CO2 emissions.
MOL, which has been delivering iron ore to steel industries for many years, said that shipping of DRI requires specialised skills and care to prevent overheating and that SMT, with a fleet of over 65 vessels involved in shipping and transshipment of dry bulk cargo, is a world leader in this field.
SMT has delivered transshipment solutions at an export operation of iron ore in Sierra Leone since 2021 and an import of iron ore in Trinidad since 2018.
The two companies have signed a memorandum of understanding under which MOL committed to bolster the transport capacity of DRI to address increasing demand with necessary safety measures in collaboration with SMT Shipping.
“To produce steel via DRI requires high-grade iron ore, not just in terms of Fe content, but also low impurity, something that is spurring the development of the huge Simandou iron ore mine in West Africa,” Derek Langston, global head of dry cargo research at Braemar told the nearly 600 delegates attending last year’s Geneva Dry.
With this green transition, Langston said: “There are going to be new trades emerging. There are going to be new centres of steel production,” suggesting both the Middle East and Australia would become more prominent as steel manufacturers.
