COSCO Shipping's US$251 million net profit last year was largely thanks to subsidies from the Chinese government amounting to $230 million, according to Alphaliner.
The consultant said the financial aid included $122 million for vessel demolition and $107 million in 'other unspecified government subsidies'.
Alphaliner said that since 2010, parent organisation Cosco Shipping Holdings had received subsidies of $1.34 billion from its government, of which some $700 million was provided for vessel scrapping.
A subsidy of around $400 per light displacement (LDT) is paid to a Chinese shipowner that recycles a China-flagged ship at a Chinese breaker's yard and, when added to the actual scrapping rate, is effectively twice the amount paid in demolition sales by yards in India, Bangladesh and Pakistan, reports The Loadstar of UK.
Beijing launched the subsidy programme in 2013 with a view to cutting vessel overcapacity and modernising China's merchant fleet; due to expire at the end of 2016, it has been extended.
After merging with state-owned carrier China Shipping Container Lines (CSCL), in March 2016, Cosco completed the $6.3 billion acquisition of Hong Kong-based OOCL in June last year, usurping CMA CGM as the world's third-biggest container line, with a fleet capacity of 2.8 million TEU.
And it has, at least on paper, taken over as 'lead line' from the French carrier in the Ocean Alliance, where the third member of the VSA grouping is Taiwan's Evergreen.
Cosco remains hugely ambitious and recent speculation is that it could be preparing a bid for Singapore's niche carrier, Pacific International Line (PIL), which is the tenth-ranked carrier with a fleet capacity of some 420,000 TEU.
By acquiring PIL, Cosco would get closer to second-placed MSC in the rankings. It operates around 3.4 million TEU of capacity and is starting to catch Maersk, which says has 'no plans' to expand its 4 million TEU fleet.
Meanwhile, like privately owned MSC, Cosco is opting for exhaust gas cleaning systems (scrubbers) on many of its largest ships in order to comply with IMO 2020, and will still be able to burn cheaper 3.5 per cent sulphur content heavy fuel oil (HFO) after January 1 next year.
Alphaliner noted that Cosco had completed the pilot installation of scrubbers on two of its smaller ships, the 2013-built 4,253 TEU panamax vessels Cosco Aqaba and Cosco Ashdod. It said following the successful trials, the carrier had advised it would retrofit scrubbers on more ships, although it did not reveal the number concerned.
However, news from the marine division of Sweden's Alfa Laval suggests Cosco is the subject client of its most recent scrubber contract. It said 'a leading Chinese shipping company' had chosen its scrubber systems for retrofit installation on '31 vessels, which are among the largest in the world'.
WORLD SHIPPING
The consultant said the financial aid included $122 million for vessel demolition and $107 million in 'other unspecified government subsidies'.
Alphaliner said that since 2010, parent organisation Cosco Shipping Holdings had received subsidies of $1.34 billion from its government, of which some $700 million was provided for vessel scrapping.
A subsidy of around $400 per light displacement (LDT) is paid to a Chinese shipowner that recycles a China-flagged ship at a Chinese breaker's yard and, when added to the actual scrapping rate, is effectively twice the amount paid in demolition sales by yards in India, Bangladesh and Pakistan, reports The Loadstar of UK.
Beijing launched the subsidy programme in 2013 with a view to cutting vessel overcapacity and modernising China's merchant fleet; due to expire at the end of 2016, it has been extended.
After merging with state-owned carrier China Shipping Container Lines (CSCL), in March 2016, Cosco completed the $6.3 billion acquisition of Hong Kong-based OOCL in June last year, usurping CMA CGM as the world's third-biggest container line, with a fleet capacity of 2.8 million TEU.
And it has, at least on paper, taken over as 'lead line' from the French carrier in the Ocean Alliance, where the third member of the VSA grouping is Taiwan's Evergreen.
Cosco remains hugely ambitious and recent speculation is that it could be preparing a bid for Singapore's niche carrier, Pacific International Line (PIL), which is the tenth-ranked carrier with a fleet capacity of some 420,000 TEU.
By acquiring PIL, Cosco would get closer to second-placed MSC in the rankings. It operates around 3.4 million TEU of capacity and is starting to catch Maersk, which says has 'no plans' to expand its 4 million TEU fleet.
Meanwhile, like privately owned MSC, Cosco is opting for exhaust gas cleaning systems (scrubbers) on many of its largest ships in order to comply with IMO 2020, and will still be able to burn cheaper 3.5 per cent sulphur content heavy fuel oil (HFO) after January 1 next year.
Alphaliner noted that Cosco had completed the pilot installation of scrubbers on two of its smaller ships, the 2013-built 4,253 TEU panamax vessels Cosco Aqaba and Cosco Ashdod. It said following the successful trials, the carrier had advised it would retrofit scrubbers on more ships, although it did not reveal the number concerned.
However, news from the marine division of Sweden's Alfa Laval suggests Cosco is the subject client of its most recent scrubber contract. It said 'a leading Chinese shipping company' had chosen its scrubber systems for retrofit installation on '31 vessels, which are among the largest in the world'.
WORLD SHIPPING