The plan is at the “ideas and research” stage, Meng Qinglin, managing director of tanker arm Dalian Ocean Shipping Co., said by text message today. He didn’t elaborate.
The state-owned shipping group may order 10 supertankers, maritime newspaper Lloyd’s List said yesterday, citing an unidentified person at Cosco Dalian. China, the second-largest crude consumer after the U.S., has boosted oil imports 66 percent over the past five years as domestic production has failed to keep pace with rising demand.
An order would also support the government’s push to increase domestic investments as an export slowdown damps economic growth. Manufacturing may contract for an 11th month in September, based on the preliminary reading of 47.8 for a purchasing managers’ index released today by HSBC Holdings Plc and Markit Economics. Supertankers cost $95 million at the end of August, according to data from shipbroker Clarkson Plc.
New vessels may add to a capacity glut that has hit earnings for VLCC operators. Returns have been negative on the benchmark Saudi Arabia-to-Japan route since July 5, according to data from the London-based Baltic Exchange. The ships, each able to hold 2 million barrels of crude, are losing $1,437 daily, its data showed.
Cosco Dalian has 18 tankers on its fleet, of which six are VLCCs, according to Clarkson data. The company is a closely held unit of Cosco Group, which is also the parent of Hong Kong- listed China Cosco Holdings Co.
Chinese shipyards’ orders fell 15 percent in the first eight months of the year to $8.8 billion, Clarkson data show, as a glut of dry-bulk ships damps demand.
Chinese ship operators are also in talks on forming a pool of very large crude carriers, China Shipping Development Co. Vice Chairman Zhang Guofa said in August. The talks have been going on for three years and no deal has been reached, he said.
China’s overseas oil purchases averaged 22.5 million tons a month from January to August, the latest available month of data from China’s General Administration of Customs. China’s own production of crude has grown 9 percent to 17 million tons.
-Alexandra Ho with assistance from Ramsey Al-Rikabi and Kyunghee Park in Singapore. Copyright 2012 Bloomberg