President Zhang Liang said he was full of confidence about the on-going contract negotiations. "The full recovery has yet to come but we are on the road to recovery."

Asia's largest shipping company by market value and other lines are seeking an $800 per forty-foot container rate increase on US west coast routes after price wars and overcapacity caused industry-wide losses. Rates have risen this year as US retailers rebuild inventories and lines cut capacity by slowing vessels and idling ships.

China Cosco may acquire new or second-hand vessels following a drop in prices, Zhang said. The company also intends to charter in dry-bulk ships during anticipated declines in rates.

Expanding Fleets
Pacific Basin Shipping Ltd, Hong Kong's biggest commodity line, has bought several ships since December and plans to expand its fleet "significantly". China Shipping Group Co plans to buy "quite a few" dry-bulk ships, President Li Shaode said. China Shipping is the nation's second-largest sea-freight company behind China Cosco's parent China Ocean Shipping (Group).

China Cosco and 14 other lines in the Transpacific Stabilization Agreement will seek an $800 increase in contracts from around May 1. Other group members include Maersk, Evergreen Marine Corp, Asia's biggest container-shipping line, and China Shipping's container unit.

Dry-Bulk Volumes
Global commodity-shipping volumes may increase 6.3 percent this year, Zhang said, as China imports more iron ore and coal.

Worldwide steel demand will return to 2007's pre-crisis levels, which will help boost iron-ore shipments 10 percent, Zhang said. Coal volumes may rise 7 percent.

The Baltic Dry Index, a measure of commodity-shipping costs, will likely average between 3,000 and 4,000 this year, said Zhang.

"The peak and the slump were not reflecting the real conditions, but only speculation and fear," Zhang said. "The market is getting more and more rational."