bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

China Shipping Development, the mainland's biggest tanker and dry bulk shipping operator, plans to grow its fleet size by 12 per cent this year even though shipping tariffs are heading down.

Contracts entered to ship coal were signed at some 3.4 per cent below last year's rates and would make up about 80 per cent of all the group's dry bulk shipments  this year, chairman Li Shaode said yesterday.

Demand for oil imports, meanwhile, will fail to match increased shipping capacity, adding to downward pressure on tariffs. While the expected volume of oil shipments  this year to meet  consumption demand would be 3 per cent up on last year, shippers had added 5 per cent to their capacity, Mr Li said.

Helping to offset this imbalance, however, would be the completion of four crude-oil storage facilities for  strategic stockpiles, which would allow shippers to import more oil than was required for immediate consumption.

To meet the total demand that is likely to emerge for both consumption and storage, the company will grow its tanker fleet by 13 per cent this year and 23 per cent by 2010, and increase the total of its very large crude carriers (VLCCs) from two to 10.

Its dry bulk fleet would grow by 7.5 per cent this year.

Meanwhile, several measures had been adopted to curb costs arising from increases in fuel prices.

With the replacement of large new vessels, fuel consumption per thousand tonne kilometre fell 10.8 per cent last year as compared with 2004, and fuel costs  accounted for 37.6 per cent of total operating costs after rising 47.1 per cent to 19.4 billion yuan last year.

Mr Li said the company had no plans to spin off its dry bulk shipping division and emphasised that energy transportation would remain its core business.

Last year, the company carried 80 billion tonne-nautical miles of oil, up 51 per cent over the previous year. Revenue from oil shipments rose 25 per cent to 4.6 billion yuan and two newly-added VLCCs resulted in a revenue of 321 million yuan, with gross margins of 130 million yuan.

Coal shipments totalled 56.4 billion tonne-nautical miles and generated revenue of  three billion yuan, up by 15 per cent and 47 per cent respectively.

The firm increased its dividend pay-out ratio to 37 per cent last year from 27 per cent in 2004 and Mr Li said the ratio would  be maintained above  33 per cent of earnings.



China Shipping plans fleet  expansion despite tariff cuts