28 March 2024 (Lloyd's List) - COSCO Shipping Ports managing director Zhu Tao has denied knowledge of a purported deal between China and the Houthis to ensure of the safety of the country’s vessels through the Bab el Mandab Strait in the Red Sea.
Last week, media reports suggested the Yemeni militants had struck a deal with China and Russia to provide safe passage in the region that would allow ships connected to those countries to avoid taking the long route round the Cape of Good Hope.
However, Zhu refuted such claims on an earnings conference on Thursday (March 28) held by the state-owned port operating arm of Cosco Shipping.
He also said CSP would not be fazed by the Red Sea crisis, stating that the initially dramatic effect would diminish. He is confident of a global recovery in 2024.
“We believe the Red Sea crisis will last for some time, but its impact on the shipping industry will gradually fade away,” Zhu told the earnings conference.
CSP will align with its clients’ shipping route adjustments, he said.
The Red Sea Gateway Terminal, in which CSP acquired equity in 2021, experienced a 16.6% year-on-year decline in throughput during the first two months of this year.
CSP operates and manages 371 berths at 38 ports globally, although China continues to be the mainstay of its business.
Total throughput at the group’s domestic facilities increased 4.8% year on year to more than 103m teu in 2023, representing 75.9% of overall volumes.
Overseas liftings grew 3.1% to 32.7m teu. CSP Abu Dhabi Terminal stood out with year-on-year throughput growth of 32.8% to more than 1.35m teu.
CSP’s total port volumes increased by 4.4% to about 136m teu in the past year.
This year, CSP will continue to enhance its mainline and feeder network in the Middle East, as it is the largest driver of overseas profit, according to chief accountant Zhao Fengnian.
With the US and Europe purportedly flagging the end of interest rate rises and the the resumption of inventory replenishment, there might be potential for further recovery in global trade this year, Chen Yipeng, deputy general manager said.
Citing Drewry’s forecast, Chen said the global pool of shipping containers is expected to rise 2.3% this year.
He further forecasted that the container volume from the Far East to the US was expected to resume growth of between 3% and 6%.
CSP’s full-year net profit in 2023 increased by 5.8% to approximately $324.6m, with revenue amounting close to $1.5bn, up 0.9%, according to a stock exchange filing.
