Chinese shipping firms buy boats as market recovery fuels optimism

Xinhua, Hangzhou :
A recovery in the shipping market has buoyed optimism among Chinese shipping companies, with many once again buying new boats to expand their fleets.
Zhongchang Marine Co., Ltd. in east China’s Zhejiang Province was among those betting on better days to come. Its president, Huang Shenghui, said he has finally seen a glimpse of hope after years in trouble as an industry downturn persisted in the wake of the global financial crisis 10 years ago.
Zhongchang Marine recently bought seven bulk cargo ships through a financial leasing program to increase its fleet to 17 ships, raising its transport capacity from 430,000 tonnes to 780,000 tonnes.
Financial leasing can help ease operating pressure and reduce financial costs, said Huang. In 2017, its revenues from the shipping business rose 70 percent year on year to 380 million yuan (60 million U.S. dollars), with the net profits exceeding 100 million yuan.
“Following the financial crisis in 2008, the shipping market entered a long period of downturn and as a result, many loss-making firms went bankrupt,”said Huang.
In the second half of 2016, the chill started to recede, and in 2017, shipping rates saw a rare bull market with continuous rises, ending a seven-year downturn.
Yao Jian, an analyst with China Securities, said that with a recovery in global trade in 2017, when China’s trade value rose 14.2 percent, the Baltic Dry Index, a shipping index measuring change in the transportation cost of raw materials, has risen above 1,200 points from around 950 points at the beginning of last year.