China COSCO Holdings scrap 7 vessels

By Finance

China COSCO Holdings have the intention to send 7 ships for demolition in 2014 according to their plans about their fleet. The ships that will be sent to a ship graveyard are: the container ship Dahe, 6 bulk carriers (Feng Guanghai, Tian Changhai, Fuqiang, Leyuan, Fuyou and Lehuan). The total capacity of the 7 ships that will be scrapped is 530,790 deadweight tons.

Different purchasers will take care of the 7 vessels at an estimated consideration of around US$26.57m (RMB166.09 million). Financial results (unaudited) of the COSCO Holdings ended last month, the losses of scrapping vessels were estimated to approximately RMB80.93 million. COSCO is trying to maintain lowest possible average age of its fleet and to reduce fuel losses in order to be more competitive. Scrapping older ships is part of the plan.

Background information:

China COSCO Holdings Company Limited (known as China COSCO) is a Chinese state-owned company created in 2005 with head office based in Beijing. The main activity of the company is related to: container shipping, dry bulk shipping, third party logistics, freight forwarding, terminal and container leasing around the world. China COSCO Holdings were threatened of delisting from the Shanghai Stock Exchange but after two years  of financial losses in the third year (2013), the company recorded a profit of RMB 235.47 million and delisting was avoided.