Dry-bulk vessel operator China COSCO Holdings Co yesterday said it expects to post better performance this year as global demand picks up and the industrial climate improves.
"This year would be better than last year," Zhang Liang, president of China COSCO, told Bloomberg yesterday. Zhang said he expects the dry-bulk business to surpass containers this year.
During the third quarter of last year, China COSCO saw its revenue drop 52.4 percent to 15.83 billion yuan, while the revenue from container shipping operations plunged 39.5 percent to 6.3 billion yuan.
Zhang said he expects the Baltic Dry Index (BDI) of commodity shipping rates to touch the 4,000 mark this year, as Chinese demand soars.
The index hit a record high of 4,661 points in November last year, but vaporized 35 percent in the following month as the annual boom season went to bust.
"The market demand is growing despite index fluctuations. It is quite normal to face challenges and wild swings in the short term. But demand has been recovering," said Wei Jiafu, president of parent company COSCO Group, the second largest shipping company in the world.
COSCO also faces pressures due to excessive container freight capacity. Wei said the future for containers largely depends on the market demand for Chinese goods from regions like Europe and the United States.
Transpacific Stabilization Agreement, an organization of 15 shipping lines including COSCO, expects vessel utilization levels to stay at around 90 percent in the coming months.
