Shipping-steel relationship turns toxic

Frankfurt

THE global steel and shipping industries have for years been locked in a tight embrace. Iron ore and coal, key raw materials for making steel, are among dry bulk shipping companies' most important cargoes.

Now, an oversupply of both ships and steel has turned that relationship toxic. Both industries need to eradicate overcapacity quickly - or risk repercussions far beyond their respective shareholders, bondholders and lenders.

Surplus capacity also threatens to undermine central bank efforts to prop up the glob…