Cosco holding company has received a subsidy amounting to us$ 644 million from the Chinese government in order to renew their present fleet.

According to a Cosco spokesman this governmental assistance will help to offset the negative impact from the low freight earnings as a result of the weak freight rates presently applicable on the main trade-lanes in combination with the high operating costs.

It is expected this arrangement will have a highly positive impact on the company’s financial result for the running year.

With the investment the Beijing’s policy remains focused to encourage fleet owners to demolish their old tonnage and replace them by new build vessels covered by the subsidy.

In April, China COSCO pushed ahead with its fleet scrapping plan by dismantling two container ships and two bulk carriers. The ship breaking in April brought the total scrapping in the first four months to eight container ships and 18 bulk carriers.