“In the shipping industry, many enterprises’ winter ‘ship even by means of loans to employees in the market saturation condition, holding a protracted war attitude, hold high cost under the old boat, waiting for the market has been heating up. The factors that lead to market oversupply cannot completely change.” CITIC Securities (600030, shares) commodities business line vice president Yu Shikai said.

The freight downturn, in 2016 the dismal performance of shipping enterprises. COSCO Haikong expects 2016 loss of 9 billion 900 million yuan; the long voyage phoenix net profit is expected to 1 million to 13 million yuan, representing a decline of about 90%. Internationally, Japan’s three largest shipping companies have released 9 months before the 2016 fiscal year (April 1st to December 31st) earnings. The shipping market downturn, three aircraft business revenues were down there, and the full year profit is expected not optimistic.

“As a result of long-term market downturn, business enterprise more and more high pressure vessel. Considering scrapping prices, shipping enterprises choose to tear down the old ship update blood, some companies also choose mergers and similar market share and competitiveness, improve. After this round of survival of the fittest, the imbalance between supply and demand market will be restored.” Yu Shikai pointed out that.

The United States Securities analyst Chen Kai believes that the dry bulk shipping market since 2017 is expected to enter a new period of recovery, recovery is expected to come mainly from the supply side capacity of the new is slowing down and the demand side continued slow recovery.

The supply side, in the dry bulk market downturn, the owner more cautious on the old ship dismantling superimposed on new capacity is not reduced, the bulk market order capacity is only 12%, over the past few years is low.