Nippon Yusen K.K., Mitsui O.S.K. Lines Ltd. and Kawasaki Kisen Kaisha Ltd. Japan's three largest shipping lines, slashed full-year profit forecasts as slower growth in China cut demand for transport of coal and iron ore to the world's most populous nation.
Nippon Yusen expects net income of ¥73 billion in the year ending March 31, 48 percent less than a previous forecast. Kawasaki Kisen cut its forecast 58 percent to ¥30 billion. Mitsui O.S.K. expects net income of ¥130 billion, 33 percent lower than earlier forecast.
Demand for transporting iron ore, coal and other commodities has tumbled, pushing the Baltic dry index, a measure of commodity-shipping rates, to a record low last quarter. Asian container shipments to the U.S. are also declining and Japan's shipping lines have cut their services.
"Next fiscal year's profit is going to be worse," said Yoshihisa Miyamoto, an analyst in Tokyo at Okasan Securities Co. "Even a small drop in the level of bulk commodity transport has a big impact on profits."
China's economy expanded at the slowest pace in seven years last quarter amid factory closures. The world's biggest steelmaker and buyer of iron ore grew at 6.8 percent in the fourth quarter, compared with a 9 percent gain in the previous three months. Also, China's exports fell the most last month since 1999.
The Baltic index tumbled 89 percent last quarter, its biggest drop on record.