China's shipping industry had a bleak performance in the first half of the year due to excess shipping capacity and the global economic downturn, according to the half-year reports of companies in the sector, the China Securities Journal reported.

By Aug 12, seven shipping companies out of 12 had released financial reports or forecasts showing a significant decline from the same time last year.

China Merchants Energy Shipping Co Ltd and COSCO Shipping Co Ltd said that their profits will drop by more than 50 percent in the first half, Hainan Strait Shipping Co Ltd reported a 25-percent decline, and even China Shipping Development Co Ltd, which was profitable last year, reported a loss in the first six months.

Excess shipping capacity and rising costs are the major reasons behind the industry’s shrinking profits.

The Baltic Dry Index, which is considered the barometer of the international shipping business, was at 941.21 points on average in the first half, while the figure was 1,379.38 points in the same period a year earlier.

Shipping expert Chen Ge told the newspaper that a significant increase in demand for bulk stock is unlikely to appear in the second half of the year due to the eurozone debt crisis.

Also, due to the serious imbalance between shipping capacity supply and demand, the lackluster situation for the international dry bulk cargo shipping market is expected to remain the same in the short run, Chen added. He said that several global shipping consultancies have said that the situation will not change in the next year and a half or two years.