China Cosco Shipping Corp (COSCOCS) was officially launched on Thursday after a merger between two leading State-owned shipping firms, creating one of the world's largest.
COSCOCS was formed by a merger between former rivals China Ocean Shipping (Group) Co and China Shipping Group - a process that started in August 2015 and was approved by the State Council in December.
Xu Lirong, chairman of COSCOCS and former chairman of China Shipping, said at a press conference on Thursday that the industry is experiencing its worst downturn since 2008 and mergers will be key to weathering tough times, Reuters reported on Thursday.
The new company will be the world's largest in terms of fleet capacity, media reports said Thursday.
The new group now has five listed arms, all of which performed well on Thursday.
China COSCO Holdings Co increased by 2.82 percent and China Shipping Development Co rose 1.21 percent, compared with a drop of 0.16 percent by the benchmark Shanghai Composite Index.
The shipping industry has been caught in a slump for years and it is still not clear when things will turn around given the lackluster world economy.
The Baltic Dry Index, an assessment of the price of moving the major raw materials by sea, fell to a record low of 290 on February 10. The index had rebounded to 307 as of Thursday.
Shipping firms and shipbuilders have been struggling. On Thursday, Jiangsu-based Sainty Marine Corp filed for bankruptcy, marking the first State-owned shipbuilder to go bankrupt.
Chinese authorities have approved several major mergers among centrally administered firms in a bid to enhance competitiveness, such as the merger between trainmakers China CNR Corp and CSR Corp, which formed CRRC Corp in September 2015.
China Minmetals Corp, one of the country's leading mining groups, will take over China Metallurgical Group Corp.
COSCOCS owns 830 vessels including container ships, dry bulk vessels and tankers, almost twice the combined fleet of Maersk and Mitsui O.S.K Lines, according to data from ship valuation firm VesselsValue.
