Shipping stocks gain as Baltic index looks up again

10 December 2008

Shipping stocks rose again for the first tine after 18 November following a one per cent rise in the Baltic freight index. Indian shipping firms recorded gains of 2.4-10 per cent after the Baltic dry cargo index rose from its 9-year lows and rose to 679 points.

Essar Shipping was up 3.5 per cent, Great Eastern Shipping Co rose 6.3 per cent to Rs155.2 while Mercator Lines traded at Rs25.35, up 9.74 per cent.

In hong Kong, China Cosco Holdings Co, the world's largest operator of dry-bulk ships, jumped to a two-month high after the Baltic dry cargo rates rose for the first time in 14 days.

The company gained 12 per cent to HK$5.98 at the close of trading. Korea Line Corp, South Korea's second-biggest bulk carrier, surged 7.3 per cent in Seoul.

The Baltic Dry Index, a measure of bulk-shipping rates, rose on expectations that a US economic stimulus plan may revive demand for shipments of iron ore. Shipping rates have tumbled 94 per cent from a May 5 record as Chinese steelmakers cut down production.

The Baltic Dry Index plummeted from more than 1100 in the middle of May to 663 last Friday, prodding the Shipping Corporation of India (SCI), to consider laying up some of its bulk carriers.