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Japan's three largest operators Mitsui O.S.K. Lines Ltd.(MOL), Nippon Yusen K.K.(NYK) and Kawasaki Kisen Kaisha (K Line) have announced their first-quarter results for 2008, with MOL leading the pack with stonger earnings for the three-month period.

Mitsui OSK Line, which operates Japan's largest dry bulk fleet, recorded a 63 percent increase in net profit for the period ended June 30th to 55.34 billion yen ($517 million). Nippon Yusen also recorded positive results for the quarter by increasing net income by 55 percent to 44.4 billion yen ($415.8 million).

Meanwhile, quarterly results for K Line, Japan's third largest ship operator, saw the company's earnings drop from 25.8 billion yen to 21.5 billion yen due mainly to losses in its containers shipping business and higher bunker prices.

K Line, which gets approximately half its sales from containers, reported a 2.3 billion yen loss on its container shipping business in the last quarter. The company also increased its average price forecast for marine fuel to $700 per tonne for this quarter, from $520 per tonne for the full fiscal year.

Both Mitsui O.S.K. and Nippon Yusen are reported to have benefited from recent demand for iron ore in China for use in construction projects before the Beijing Olympics. Rates for transporting bulk commodities such as iron ore, steel and coal have been rising steeply in recent months, which in turn has boosted revenues for Japan's two leading ship operators and helped to offset the rise in bunker costs.

Nippon Yusen increased its bunker price forecast by 35 percent for the full fiscal year to an average of $673.3 per tonne, whilst Mitsui O.S.K. raised its average fuel forecast to $655 per tonne.

The outlook of higher bulk shipping rates has led to Mitsui O.S.K raising its net income prediction from 200 billion yen to 210 billion yen for the fiscal year.

Meanwhile, Nippon Yusen has kept its full-year profit outlook unchanged at 140 billion yen, whilst K Line's net income prediction also remains the same at 78 billion yen.