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.

SCI has already docked Maheswari, a 26,000-dwt handymax, in a Gujarat port after the vessel recently completed her voyage from Indonesia to Tuticorin carrying coal. This is the first bulk carrier that SCI has laid up.

SCI has a total of 20 bulk carriers – 17 handymax and three handysize with a total tonnage of about 8,35,000 dwt. and the freight for a handymax has now dropped to around $3,000 a day from more than $30,000 a day a few months ago.

Some of SCI's bulk carriers are on contract of affreightment with Steel Authority of India for importing coal from Australia. Earlier, these vessels used to carry iron ore exports to China and from there they would go to Australia.

Since exports to China have sharply declined, the vessels are now going to Australia in ballast.

Tankers are now the main source of business for SCI. More than 70 per cent of SCI's fleet comprises tankers totalling 3.5 million dwt, mostly crude tankers.

The tanker market too is down but not as badly hit as the bulk carrier market. SCI, in fact, has planned to acquire four new-building double hull very large crude carrier (VLCC) of about 318,000 dwt each.

Great Eastern Shipping Co Ltd said on Tuesday it has contracted to sell one of its dry bulk carriers, its fourth in the past two weeks.

In the past three months, the Great Eastern Shipping Co has contracted to sell the 24-year-old `Jag Rishi', a 41,093 dwt Handymax dry bulk carrier; the 31-year-old `Jag Vidya', a 27,451 dwt Handysize dry bulk carrier; the 5-year-old `Jag Rahul', a 52,364 dwt Supramax dry bulk carrier; the 5-year-old `Jag Rahul', a  52,364 dwt Supramax dry bulk carrier;  and the 24-year-old `Jag Rani', a. 41,545 dwt Handymax dry bulk carrier.

GE Shipping said its fleet of 42 vessels comprises 32 tankers (12 crude carriers, 18 product tankers, 2 LPG carriers) and 10 dry bulk carriers with an average age of 9.9 years aggregating 2.97 million dwt.

The shipping industry in India is estimated to have cancelled orders worth around Rs3,750 crore for new ships so far this year. Reports say orders for about 35 ships that were to be built in shipyards around the country face cancellation.

Total orders at Indian shipyards amounted to Rs25,000 crore, according to shipping industry estimates.