Lack of demand contributes to the closure of Chinese shipyards

The China Ocean Shipping (Group) Company plans to close three of the five shipyards. The reason is the overcapacity in the industry in the global market, canceled orders and delayed acceptance of ships by shipowners, the group's chief executive said.

However, the company plans to continue producing construction vessels for the maritime sector and other highly profitable vessels such as icebreakers and forestry rigs.

Low world oil prices are hampering the demand for offshore jobs, while the shipbuilding industry is experiencing an increase in the cost of materials and labor, which reduces the profitability of production.

China Shipping Company Group, known as COSCO, is the largest treasury-owned conglomerate in China's logistics industry. Among other things, the owner of a line of containers for the transportation of bulk products with a fleet of more than 500 ships ranks sixth in the world in terms of container capacity (130 container ships with a capacity of 600 thousand TEU).

In February 2016, COSCO took over the China Shipping Group, forming a group called the owner of China COSCO Shipping, and last April acquired 51 percent of the shares in the port of Piraeus (Greece).