By Kyunghee Park

(Bloomberg) — Cosco Corp. Singapore Ltd., the shipbuilding arm of China Ocean Shipping Group, is exploring choices to assist its enterprise as a hunch in commodities buying and selling and oil costs results in sluggish demand for brand spanking new vessels. The inventory surged.

Cosco Singapore’s subsidiary China Shipyard Group Co. is contemplating increasing its funding sources and optimizing its asset construction, the corporate stated in a press release Wednesday, with out offering additional particulars.

The assertion got here in response to questions from the Singapore trade because the inventory rose for a sixth straight day. The shares jumped 16 % to S$0.505 on the shut of commerce, the best degree since June.

The shipyard expects to report a “significant net loss” within the fourth quarter as a 39 % decline in bulk transport charges has hit demand for brand spanking new ships and led some prospects to cancel current orders, Cosco Singapore stated this month. Customers are asking shipbuilders to defer supply of offshore drilling rigs amid a hunch in oil costs, undermining their earnings.

The Singapore-based firm didn’t reply to an e-mail looking for feedback. An e-mail and a telephone name to Cosco in Beijing weren’t answered.

Trading Halt

Shares of Cosco Singapore resumed buying and selling Dec. 14 after being suspended for 4 months pending an announcement referring to asset reorganization at its Chinese state-controlled father or mother.

China’s State-owned Assets Supervision and Administration Commission introduced approval Dec. 11 for the reorganization of China Ocean Shipping Group and China Shipping Group. The transfer is a part of authorities efforts to shrink industries affected by overcapacity whereas creating globally aggressive companies.

The authorities’s plan would create 4 listed entities, every specializing in one facet of the transport enterprise: containers, financing, terminals, and oil and gasoline, in keeping with China’s official Xinhua News Agency.

Cosco Singapore stated in November {that a} consumer canceled an order for a bulk provider, which was because of be delivered within the second quarter of 2016. The firm additionally agreed to defer supply of a drilling unit to Sevan Drilling Ltd. by six months to April 2016.

The Singapore firm posted a lack of S$86.1 million ($61 million) within the first 9 months of the yr, in contrast with revenue of S$34.1 million a yr earlier. Sales dropped 16 % to S$2.79 billion. Its money and money equivalents totaled S$1.5 billion on the finish of September, falling from S$1.8 billion a yr earlier.

–With help from Haixing Jin.

©2015 Bloomberg News