COSCO
Ship Holdings and China International Marine
Containers, both subsidiaries of
the Cosco group, posted
lower earnings for the first quarter of 2020, as the Covid-19 pandemic impacted on shipping
demand during the period.
Domestic
volumes were hit the hardest and weak demand was also a factor as Cosco Ship
Holdings announced that net profit for the first quarter of 2020 fell 57 per
cent to CNY292 million (US$41 million), as container volumes fell 4 per cent to
5.61 million TEU.
Chinese domestic routes saw the
largest drop, with volumes falling 16 per cent to 1.05 million TEU. Asia-Europe
and intra-Asia volumes were fairly resilient, registering negligible drops of
less than 1 per cent, to 1.13 million TEU and 1.83 million TEU.
Cosco Ship Holdings' terminal
operating unit, Cosco
Shipping Ports, earlier announced a
4 per cent drop in throughput in Q1 2020, recording roughly 27.48 million TEU.
China
International Marine Containers (CIMC), the world's largest container manufacturer, said container and reefer
sales for the first quarter of 2020 fell 28 per cent and 23 per cent to
164,500TEU and 25,200TEU, respectively, due to weaker demand. The company
believes that demand will gradually recover as the situation normalises,
reports Container News, Jacksonville.
CIMC's revenue fell 17 per cent
to CNY15.85 billion resulting in a net loss of CNY568.05 million compared with
a net profit of CNY500.19 million in Q1 2019.
While CIMC tried to maintain
container prices, this was not supported by the weak demand for new containers,
as well as a slowdown in manufacturing operations due to government-imposed
movement controls.
CIMC said: "The container
market is expected to revert to its normal state in the future upon the
stimulus of new fiscal policies of governments and the gradual recovery of
economy."
Shipping consultancy Drewry said
that the disruption to shipping demand will keep container prices and rentals
under pressure in 2020.
Drewry's
head of research products, Martin Dixon, noted that at the start of 2020, a
20ft standard container was priced around $1,750, and rose to as much as
$2,150, before dropping to $1,900 in late March.
Source : HKSG.
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