THE slowdown in the shipping market has been reflected in third-quarter Cosco results which recorded a revenue decline of CNY53.71 billion (US$8.6 billion) in the first nine months, and a loss that widened 30 per cent compared to the same period in 2011, according to Xinhua.
Carriers now rely on non-vessel-shipping business and the remaining contracts to support itself. They also suffer from difficulties in winning new contracts, delivering existing orders and collecting outstanding sum.
Shipping sector profits continued to shrink in the third quarter. Some even recorded significant loss. The opinion from the industry was that even rates on European lanes have temporarily gone up in winter, the real recovery will not come before 2015.
Besides, carriers and shipbuilders are also suffering from the gloomy situation. China Shipbuilding Industry Corporation`s third quarter report shows that its net profit plunged 83.34 per cent year on year to CNY70.49 million. In the first three quarters, its net profit dropped 70.3 per cent to CNY546 million.
Another shipbuilder, the Guangzhou Shipyard International Co Ltd, recorded more than 50 per cent`s fall in its net profit in the first nine months and a net loss of CNY44.6 million in the third quarter.
According to the latest statistics from China`s Ministry of Industry and Information Technology, in the first three quarters, China`s shipbuilding completion volume declined 18.5 per cent to 41.58 million deadweight tonnes. New orders plunged 46.9 per cent to 15.41 million deadweight tonnes.
An S&P Consulting analyst said that the major cause of the gloomy situation lies in overcapacity. The shrinkage in demand and growing delivery of newbuildings have resulted in severe redundancy of capacity.