Singapore Authorities Releases Impounded Ship to COSCO

Singapore authorities returned a dry bulk vessel to China COSCO Holdings , six days after it was impounded over a financial dispute with one of its clients, court documents and a company official said on Thursday.

The 74,000-tonne bulk carrier, Song Shan Hai, was released by Singapore’s Supreme Court late Wednesday, easing concerns over China’s relationship with the global maritime community.

“The court released the ship because we gave them information stating that the other company had broken the contract with us,” said a Hong Kong-based COSCO official.

COSCO, operator of the world’s largest bulk cargo fleet and a major global container shipper, remained in talks with its unidentified client over an unpaid bill of around $1 million, the official added.

The ship is the third vessel to be seized by authorities this year as the Chinese firm struggles with a severe downturn in the freight market.

The other two ships were briefly impounded after COSCO halted payments to several ship owners to force better terms, a move that hurt its relationship with some maritime companies.

COSCO said the Singapore case was not related to the lease disputes earlier this year.

Many of COSCO’s shipping contracts were struck during the 2008 shipping boom, when the industry’s largest capesize vessels were being rented by COSCO and others for around $100,000 a day.

The dry bulk market has since plummeted due to the economic downturn and an oversupply of vessels, leaving COSCO paying 2008 prices for ships that now rent for $23,000 a day.

COSCO made a net loss of 2.07 billion yuan ($325.81 million at the time) in the third quarter, hit by sliding freight rates and overcapacity in the industry.

Its Hong Kong-listed shares have lost more than half their value since the start of the year, underperforming a 17 percent drop in the Hang Seng Index .

Reporting by Randy Fabi (Reuters)