Mumbai: Huge Chinese demands for raw materials
like steel, iron ore and coal and high import volumes
of grain and other items by the US and the UK have pushed
the freight rate for Indian shipping lines to a new high.
scrips of the shipping companies like Shipping Corporation
of India (SCI), Great Eastern (GE) Shipping, Varun Shipping,
Essar Shipping and Mercator Lines have seen their prices
move up over 50 per cent in the past three months. For
the first time in the last five years, foreign institutional
investors have also picked up minority stakes in the shipping
SCI scrip has gone up by 81 per cent to Rs 105.70 from
a low of Rs 58.35 per cent, while GE Shipping has appreciated
by 50 per cent from a low of Rs 52 to close at Rs 81 on
Wednesday. Other shipping scrips like Varun Shipping and
Essar Shipping have gained 40 and 71 per cent, respectively.
Baltic dry index, which is the bench mark for freight
rates on vessels carrying bulk goods, including coal,
iron ore and grain, has quadrupled in the past year and
has jumped 50 per cent in the past three weeks.
dry bulk earnings of capsize vessels have moved up from
$30,091 per day as on 5 September to $43,326 as on 3 October.
The earnings of the Panamax vessels have gone up to $24,534
per day from $15,943 while the freight rate of Hamax Avg
vessels has increased to $16,075 per day from $13,700.
director S S Rangnekar says a record increase in Chinese
imports of iron ore and steel were the key reason for
the initial jump in the shipping prices. "An unexpected
rise in coal imports for Europe, Japan and the US this
year has also helped to lift prices. Besides, the huge
distance between China and various other countries will
also help the shipping lines to increase their profits.
The trend in the dry bulk category is likely to continue
for the next one year. In the container segment, the trend
will continue till 2005-06."
senior GE Shipping official says there has been a change
in the trade pattern which is reflected in the higher-tonne
mile demand. Moreover, additions to the dry bulk fleet
have been minuscule and this, too, has triggered a surge
in freight rates.
of the Indian National Shipowners'' Association say the
recent surge has been sparked by the start of the North
American grain-exporting season. "The dry bulk shipping
capacity is likely to rise about 2.5 per cent this year
and 3 per cent next year."