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Call for Chinese VLCC pool

Shanghai: Mao Shijia, the md at wet and dry major China Shipping Development, has called for a Chinese VLCC pool to overcome the current downturn. Speaking at TradeWinds' Shipping China Energy conference, Mao acknowledged that tanker rates continue to plunge this quarter and will continue to do so this year and next. The scrapping of single hulls should see the tanker market bottom out next year and come back to health in 2011, he suggested. He was confident that of the various shipping sectors tankers would be the first to come out of the current shipping malaise.
"Freight is below cost due to irrational competition between shipping companies," he said.
Mao called for Chinese owners to get through the "severe winter" by setting up a VLCC pool. This would help share risks and get scales of economy.
He also called for tanker owners to go beyond their traditional seaborne remit and further their oil supply chain footprint, extending interests into terminals, pipelines and rail.
At a q&a session later Mao said that the coming together of the big three state owned oil conglomerates and the big three state owned shipping firms was a good and inevitable thing. "I think there is a possibility for upstream and downstream businesses to colloborate together to consolidate business."  This talk of Chinese partnership worried some shipowners in the room, who voiced concerns over possible protectionism being exercised by China's shipping majors. [27/04/09]

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