China Cosco reports H1 loss of US$432 million on rate volatility

China Cosco Holdings (1919.HK) surprised analysts with greater-than-expected losses of US$432 million for the first half of the year, Bloomberg reported. The country’s largest shipping company blamed falling cargo rates and rising fuel costs for the decline. Rates for commodities shipping have fallen 27%, and average container rates fell 14% as fleets have expanded, intensifying competition over cargo. Cosco owns 234 vessels for shipping commodities, charters another 201, and has 22 on order through 2013. Its container fleet has 153 ships, with another 34 on order. However, Cosco has had several of the vessels it charters seized in port for lack of payment. Dryships CEO George Economou said he has already had one vessel he leased to Cosco impounded and may “arrest” others. Cosco contends that disputes with shipowners were part of “normal operations.”