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China Shipping to carry more coal for Shenhua |
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Monday, 08 March 2010 |
 China Shipping (Group) Company will expect to ship 40 million tons of coal for Shenhua Group in 2010, Li Shaode, the company's president said yesterday.
"We will intensify our cooperation with Shenhua Group to improve the
freight capacity for coal", Li, who is also a member of the National
Committee of the Chinese People's Political Consultative Conference
(CPPCC), told China Daily on the sidelines of the ongoing conference.
"The first two months have already seen seven million tons of coal
shipped," he said, "and we estimate that it will rise to 40 million tons
for the whole year."
As the second largest sea-cargo group in China, China Shipping (Group)
Company transported less than 10 million tons of coal for Shenhua Group
in 2009, while Shenhua Group, China's largest coal producer, had 159
million tons of its coal shipped in total that year.
According to data from the National Coal Association, 2010 coal demand
is likely to rise by 4 to 6 percent over last year to some 3.36 billion
tons, and production will increase by nearly 300 million tons.
Efforts to Improve Freight Capacity
However, Li also expressed his concern about the slow recovery of the
global economy and its effect on China's exports, and said the company
will not adjust its container business this year.
Instead, it will concentrate its efforts on improving the freight
capacity of oil tankers and bulk carriers.
The shipping capacity of oil tankers will rise by 30 percent to 7 to 7.5
million tons in 2010, and that of bulk carriers will increase by 15
percent to 30 percent to 8 to 8 million tons, he said. Data show that
the freight capacity of the company's bulk carriers rose by 10% in 2009
over the previous year.
"By the end of this year, 12 oil tankers each with a carrying capacity
of 3 million tons will be put into operation," he said.
The company has also ordered 16 VLOCs (Very Large Ore Carriers), half
with a freight capacity of 230,000 tons and half 3 million tons. "Four
of the 230,000 ton-capacity VLOCs will be put into use this year," Li
added.
No Major M&A Investment in 2010
When asked about the company's overseas merger and acquisition plans for
2010, Li Shaode replied that although there are ample opportunities,
right now is not the best time for major investments. "We will have to
wait till the next year, when we will pour our money into port
construction and logistics," he said.
However, Li did reveal that talks on liquefied natural gas (LNG)
transportation between the company and China's two oil giants, China
National Petroleum Corporation (CNPC) and China Petroleum and Chemical
Corporation (Sinopec), will yield an agreement soon.
As for the global shipping market in 2010, Li said he expects the cargo
rates to "rise in the first few months and drop in the last few months,"
as indicated by the current supply and demand. "So we will try to
attract as many as customers as possible in the first half of the year,"
he said.
Latest Agreements
China Shipping Development, a listed subsidiary of China Shipping
(Group) Company, concluded a strategic cooperation agreement with China
Datang Corporation (CDT) while China Shipping Container Lines, another
listed subsidiary signed a strategic cooperation agreement with China
Grain Reserves Corporation (Sinograin) a day later.
Source: China Daily
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