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COSCO CEO: “We’re Only Beginning to See Signs of Recovery”

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October 23, 2012
cosco logo(Bloomberg) — China Cosco Holdings Co., the nation’s largest listed shipping company, said the industry will expand as Chinese economic growth picks up momentum.

“We’re only beginning to see signs of recovery,” China Cosco Chairman and Chief Executive Officer Wei Jiafu said in an interview at the Tsinghua Management Global Forum in Beijing yesterday. “Premier Wen said the Chinese economy has seen a turning point in the third quarter, and it is bullish news for the shipping industry.”

The government this month announced tax and financial support for local shipping lines after China Cosco and China Shipping Container Lines Co. both posted wider first-half losses amid falling freight rates. A pick-up seen in Asia’s largest economy after seven quarters of slowing growth may also help boost freight demand.

China Cosco’s general manager Ma Zehua said earlier this month that 2013 will be a bit better for the industry than this year because of improvements in the global economy. Still, a full recovery for the sector isn’t probable in the next two to three years, he said.

The shipping line has forecast a nine-month loss as rising capacity in the global fleet and slowing trade sapped cargo rates. The Baltic Dry Index, a benchmark for commodity-shipping costs, has plunged 52 percent in the past 12 months.

Reports showed last week that industrial production, retail sales and fixed-asset investment in China accelerated in September.

Copyright 2012 Bloomberg.

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