MOL and SMT link up on direct reduced iron shipping

In a significant move towards sustainable shipping, Japanese shipowner Mitsui OSK Lines (MOL) has announced a partnership with Cyprus-based dry bulk specialist SMT Shipping. This collaboration aims to explore shipping options for direct reduced iron (DRI), a material gaining traction as the steel industry seeks to lower its carbon footprint. The memorandum of understanding between the two companies highlights their commitment to enhancing transport capacity for DRI while ensuring safety measures are in place.

Strategic Collaboration for Sustainable Shipping

Mitsui OSK Lines has a long-standing history of transporting iron ore to steel manufacturers. With the growing interest in DRI, produced through the reduction of iron ore using natural gas or hydrogen, MOL recognizes the need for specialized shipping capabilities. DRI requires careful handling to prevent overheating, making SMT Shipping’s expertise invaluable. SMT operates a fleet of over 65 vessels dedicated to the shipping and transshipment of dry bulk cargo, positioning them as a leader in this sector.

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SMT Shipping has demonstrated its capabilities in transshipment solutions, having successfully managed iron ore export operations in Sierra Leone since 2021 and import operations in Trinidad since 2018. The partnership with MOL aims to address the increasing demand for DRI, which is essential for producing steel with lower CO2 emissions. This collaboration is expected to enhance the efficiency and safety of DRI transport, aligning with global efforts to promote greener practices in the steel industry.

Emerging Trends in Steel Production

The shift towards DRI is driven by the need for high-grade iron ore, characterized by low impurities and high iron content. This demand is fueling the development of significant mining projects, such as the Simandou iron ore mine in West Africa. Derek Langston, the global head of dry cargo research at Braemar, highlighted the potential for new trade routes and steel production centers to emerge, particularly in regions like the Middle East and Australia. As the steel industry undergoes this green transition, the partnership between MOL and SMT Shipping is poised to play a crucial role in shaping the future of sustainable steel production.