6 March 2005 — The New Dark Age
The China Shipping Group was founded on July 1,1997, in Shanghai. It is one of the 44 key state-owned enterprises under the direct administration of the government, but also has two publicly listed companies, China Shipping Development and China Shipping (Hainan) Haisheng, whose H shares and A shares are traded on the stock markets of Hong Kong and Shanghai respectively. These shares have risen 27 percent in Hong Kong in the past year, compared with tiny 2.4% increase in the Hang Seng index.
The company operates 5 specialized shipping fleets of oil tankers, tramps, passenger ships, container vessels and special cargo ships, of over 400 vessels ( Dwt 11.5mn tonnes).
China Shipping Development, oil and coal carrier, has announced massive expansion plans to its fleet of 166 vessels ( Dwt 5.25 Mn Tonnes) and will spend 5 Mn Yuan (US$550Mn) and double capital expenditure says Chairman Li Shaoda. Smaller state carriers Sinotrans and Hebei Ocean have also announced expansion plans and have placed orders for VLCC’s with the Universal Shipyard in Japan.
With massive growth the Chinese mainland will import 120-130 million tons of crude oil in 2005, 88% of last years oil imports travelled by overseas carriers, official policy is to reduce this to 50% by end 2005. China consumed one in 12 barrels of crude oil in the world last year and imports rose by 34%. The International Energy Agency forecast total global oil demand to grow by 1.52 million barrels a day, or 1.8 percent, Chinese demand is set to grow 6.3 percent in 2005.
Meanwhile China is scouring the world for energy sources, for example Energy Minister Sheikh Ahmed Fahd al-Sabah of Kuwait announced in February 2005 that Kuwait intends to increase crude oil exports to China from the current 20,000 bpd to 350,000 bpd and has opened a marketing office in Beijing.
Immediate plans by China Shipping are for 6 oil tankers with a capacity of 644,000 deadweight tons and 6 bulk carriers with capacity of 344,000 deadweight tons.
In July 2004 the first Chinese built Very Large Crude Carrier (VLCC) “Xin Jin Xang” was launched at Dalian, a sister vessel is scheduled to be delivered in next May. The expansion of China’s fleet has helped increase the price of a new VLCC by 56 percent since 2003 to US $120 million, and this has had an impact on the price of second hand VLCC’s which have risen by about 50% to US $86 million in the past 12 months
At the same time the largest container ship in the world (built by Samsung in Korea, it is claimed to be longer than any aircraft carrier afloat) will carry 8,500 containers, “Asia” took it’s maiden voyage from Shanghai to Long Beach California in July. 4 identical monster vessels will soon join the fleet, the first two to be named “Europe” and “America”.
Since then “Asia” has completed 6 successful voyages with nearly 50,000 standard containers fully loaded to Europe and U.S. The total revenue of these 6 voyages exceeded 43 million dollars.
COSCO Pacific China’s biggest port operator’s Chairman Wei Jiafu is quoted as saying that China’s container terminals volume rose 27 % in 2004. Their shares are quoted in Hong Kong and rose 48% last year. The company is rapidly developing container terminals in China’s Nansha, Ningbo, Nanjing and Tianjin ports to increase total annual handling capacity by about 30 percent to more than 47 million containers.
With China Ocean Shipping (Group) Company, COSCO own China International Marine Containers (CIMC), the world’s largest manufacturer of shipping containers – 50% of the worlds supply. They have recently introduced, to meet US security requirements, the world’s first “Tamper Evident Security Container” system. Each year, more than nine million freight containers arrive at U.S. ports, an approximately 50% increase in 4 years as imports have soared from Asia. This container incorporates US and Swedish electronic technology that is built into the original container design and will become increasingly important to maintain the free flow of goods through the supply chain, uninterrupted by security delays.
In 2000, COSCO signed for 12 new 5688 container vessels from the Hudong Zhonghua Ship Building Group CO., LTD., the 11th in the series was launched on January 13th 2005 “Xin YAN TAI” 6 months early was loaded the same day and commenced its quaintly named “virginal” voyage for the Americas the next day.
Slow boats for China are a thing of the past. Fast boats, the sign of the future.