China'S Bulk Cargo Pport Market "Can Not Afford To Hurt"

Under the complex and changeable global economic situation and the heavy downturn of international shipping industry, bulk cargo pportation is no exception.

In the first half of the year, the downturn of China's bulk cargo pportation market was indeed "not able to afford to hurt".

Bulk cargo pportation encountered double low

Affected by the unstable world economic situation, tight macro-control in China and frequent occurrence of natural disasters all over the world,

China Ocean

In the first half of this year, China ocean ocean realized a business income of 340 billion yuan, down 10.4% compared to the same period last year. The net profit attributable to the parent company's owners was -27 billion yuan, down 176.8% from the same period last year.

The global economic situation is complex and changeable, and the international shipping industry is in the doldrums.

Dry bulk business and pport capacity

In the first half of this year, China's ocean dry bulk cargo business totaled 136 million 249 thousand and 300 tons of freight volume, down 2.62% compared to the same period last year. Freight turnover volume was 6876 million tons in the sea, an increase of 0.37% over the same period last year, and the operating income was 12 billion 227 million yuan, a decrease of 27% over the same period last year.

The daily locking ratio of dry bulk cargo is 63%, and the period of the lock period is lower than the average level of last year, the average decrease is about 30%.

In terms of capacity, China's ocean dry bulk cargo ships have 435 ships and 37 million 871 thousand deadweight tonnes, representing a decrease of 2.7% compared with the same period last year, a decrease of 1.8% from the end of last year.

Among them, there are 234 ships and 18 million 867 thousand deadweight tons, with an average age of 13.7 years, 201 ships and 19 million 4 thousand DWT.

In addition, China Ocean also holds a forward freight agreement with a total balance of 355 million yuan.

COSCO, as usual, only gives the total amount of profits and does not directly point out the profit in various fields in the annual report. However, at least one thing is certain that the haze left by the operation of China COSCO in the FFA market in 2008 has not dissipated until today.

This is reminiscent of the fact that China COSCO continued to do more FFA in May 2008 when BDI reached its unusually high level, until the BDI all the way down to December.

As of December of that year, the loss of fair value change of the FFA agreement of China COSCO dry bulk shipping company amounted to 5 billion 380 million yuan, deducting 1 billion 430 million yuan of revenue from the delivery part, and the FFA agreement of COSCO held a loss of 3 billion 950 million yuan in that year.

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Now, the remaining 355 million debt is a constant reminder that there are not many derivatives markets.

Controversial "rent arrears"

In the near future, China's offshore "rent arrears" incident has become a hot topic for a long time, but the Chinese ocean going to earn tens of billions of yuan a year will not be able to afford the rent.

In the first half of this year, China's offshore business suffered losses, which was reported as a result of the downturn in the international shipping industry in the first half of the year. The shipping market was characterized by high capacity, high cost and low freight rates, and the market competition was fierce.

Over the past three years, the international dry bulk shipping market has undergone a drastic change of ice and fire.

BDI hit a high of 11793 on 20 May 2008, when the largest Cape of Good Hope ship's daily rent was as high as $211 thousand and 600 and remained at about 80 thousand US dollars for a long time.

China COSCO 2008 China Daily reported that under the prevailing circumstances, China COSCO has rented 228 ships to expand its capacity on the basis of 204 dry bulk vessels.

The Chinese ocean shipping dispute occurred on 2008.

Shipowners usually ship orders after finding the lessee, and the contract period is at least 5 years.

Therefore, the long term lease agreement signed with the shipowners before the Chinese ocean market must pay the rent at the highest point of the same market when the market is depressed, and the contracts will not expire in a short time.

However, in the long run, COSCO actually has further plans.

When the Chinese ocean decided to stop paying rent, it was expected that the shipowners would seize the ship. If the two sides applied for arbitration, even if the time when the arbitral award of the property was lost, the Chinese COSCO could be reduced by the loss of the ship's arrest, and the payment of compensation after two years could alleviate the current cash flow pressure.

In addition, due to the excess capacity of the dry bulk shipping market, the Chinese ocean can therefore reduce its capacity through legal "help".

Although the Greek Shipowners may win arbitration, the "win" is only superficial.

China Ocean only pays more fines, and those ships will "return to the motherland", which is what Chinese COSCO likes to see.

So the Greek Shipowners would not be too foolish to rush to tear themselves away from the Chinese ocean, because if so, they will not be rented.

csdc

In its semi annual report, China Shipping Development pointed out that the market in 2011 will be inferior to 2010.

In the second half of the year, the overall situation of the international dry bulk shipping market is still not optimistic. It is expected to maintain the pattern of low level shocks, but it does not exclude the emergence of some local hot spots.

The company also revealed that in addition to China's coastal areas, international oil pportation and dry bulk pportation mainly based on coal and iron ore, it is still expanding LNG pportation business.

In the first half of this year, the enterprise and Japanese merchant ship reached a consensus on the joint venture of 4 single ship companies and 4 LNG ships to participate in LNG pportation, and signed the agreement in July.

The 4 ships are expected to bring more stable investment returns to the company after its commissioning in 2016. The LNG project will provide a new growth point for the company's future business development.