China Cosco Holdings Co., Asia’s largest shipping company by market value, forecast a 32 percent drop in dry-bulk traffic this year as expansion in the global fleet outpaces demand, Bloomberg reports.
Commodity shipments will slump to 959 billion ton- nautical miles this year from 1.42 trillion last year, the Tianjin, China-based shipping line said in a statement late yesterday. Container volumes will rise 9.4 percent to 6.8 million, it said.
Global dry-bulk capacity will expand 14 percent this year, outpacing a 6 percent rise in demand, the shipping line said, after China financed orders for new vessels during the global recession to help prop up shipyards. The capacity increase has caused the Baltic Dry Index, a commodity- shipping rates benchmark, to drop 47 percent in the past year.
“There are simply too many bulk ships on order right now,” said Um Kyung A, an analyst at Shinyoung Securities Co. in Seoul. “The Baltic Dry Index could remain at current levels for about four years unless there’s a spike to demand.”
Traffic for the company’s dry-bulk fleet last year was little changed, trailing a 19 percent jump in container volumes as rebounding consumer spending in the U.S. and Europe revived demand for shipments of Asian-made goods. The company’s container-shipping revenue was 43 percent higher than its dry-bulk sales in 2010 after being almost the same a year earlier.
Container Gains
The container pick-up helped China Cosco, operator of the nation’s largest cargo-box fleet, post a 2010 net income of 6.9 billion yuan, compared with a year-earlier loss of 7.5 billion yuan, according to the statement. The company was expected to post a profit of 6.8 billion yuan, according to the average of 14 analyst estimates compiled by Bloomberg.
China Shipping Container Lines Ltd., the nation’s second-biggest cargo-box carrier, separately reported a profit of 4.2 billion yuan last year, compared with a loss 6.49 billion yuan a year earlier, in a Shanghai stock exchange statement.
This year, the container-shipping market will “maintain its equilibrium due to the increase of cargo volume and reasonable management” of capacity industrywide, China Cosco said.
Europe, Transpacific
The company’s container-shipping revenue surged 68 percent last year to 46.3 billion yuan, with sales on Asia- Europe and transpacific routes both almost doubling because of increased volumes and higher rates. The company, with 150 container ships at the end of last year, will receive six this year and 32 more in the next two years.
China Cosco’s dry-bulk fleet totaled 450 vessels at the end of last year. It has 18 ships on order through 2014.
The company, controlled by China Ocean Shipping (Group) Co., dropped 0.5 percent to HK$8.05 as of 10:29 a.m. in Hong Kong. The stock has fallen 2.3 percent this year, while the benchmark Hang Seng Index climbed 1.3 percent.
The Baltic Dry Index dropped 41 percent in 2010 to end the year 1,773. The index has fallen 11 percent this year because of an oversupply of vessels and slowing demand in China.
Bulk Backlog
The backlog of on-order bulk ships is equal to 43 percent of the current global fleet by deadweight tons compared with a 25 percent rate for container ships, according to data on the Bloomberg terminal.
Iron ore imports by China, the world’s biggest buyer, may also fall for a second year in 2011 as record high prices spur output from domestic mines, according to Mysteel Research Institute. Shipments into the country fell 1.4 percent last year, the first decline since 1998.
Commodity shipments will slump to 959 billion ton- nautical miles this year from 1.42 trillion last year, the Tianjin, China-based shipping line said in a statement late yesterday. Container volumes will rise 9.4 percent to 6.8 million, it said.
Global dry-bulk capacity will expand 14 percent this year, outpacing a 6 percent rise in demand, the shipping line said, after China financed orders for new vessels during the global recession to help prop up shipyards. The capacity increase has caused the Baltic Dry Index, a commodity- shipping rates benchmark, to drop 47 percent in the past year.
“There are simply too many bulk ships on order right now,” said Um Kyung A, an analyst at Shinyoung Securities Co. in Seoul. “The Baltic Dry Index could remain at current levels for about four years unless there’s a spike to demand.”
Traffic for the company’s dry-bulk fleet last year was little changed, trailing a 19 percent jump in container volumes as rebounding consumer spending in the U.S. and Europe revived demand for shipments of Asian-made goods. The company’s container-shipping revenue was 43 percent higher than its dry-bulk sales in 2010 after being almost the same a year earlier.
Container Gains
The container pick-up helped China Cosco, operator of the nation’s largest cargo-box fleet, post a 2010 net income of 6.9 billion yuan, compared with a year-earlier loss of 7.5 billion yuan, according to the statement. The company was expected to post a profit of 6.8 billion yuan, according to the average of 14 analyst estimates compiled by Bloomberg.
China Shipping Container Lines Ltd., the nation’s second-biggest cargo-box carrier, separately reported a profit of 4.2 billion yuan last year, compared with a loss 6.49 billion yuan a year earlier, in a Shanghai stock exchange statement.
This year, the container-shipping market will “maintain its equilibrium due to the increase of cargo volume and reasonable management” of capacity industrywide, China Cosco said.
Europe, Transpacific
The company’s container-shipping revenue surged 68 percent last year to 46.3 billion yuan, with sales on Asia- Europe and transpacific routes both almost doubling because of increased volumes and higher rates. The company, with 150 container ships at the end of last year, will receive six this year and 32 more in the next two years.
China Cosco’s dry-bulk fleet totaled 450 vessels at the end of last year. It has 18 ships on order through 2014.
The company, controlled by China Ocean Shipping (Group) Co., dropped 0.5 percent to HK$8.05 as of 10:29 a.m. in Hong Kong. The stock has fallen 2.3 percent this year, while the benchmark Hang Seng Index climbed 1.3 percent.
The Baltic Dry Index dropped 41 percent in 2010 to end the year 1,773. The index has fallen 11 percent this year because of an oversupply of vessels and slowing demand in China.
Bulk Backlog
The backlog of on-order bulk ships is equal to 43 percent of the current global fleet by deadweight tons compared with a 25 percent rate for container ships, according to data on the Bloomberg terminal.
Iron ore imports by China, the world’s biggest buyer, may also fall for a second year in 2011 as record high prices spur output from domestic mines, according to Mysteel Research Institute. Shipments into the country fell 1.4 percent last year, the first decline since 1998.