Shipping stocks climb as Baltic Dry Index rises 14.6%

Shipping stocks climb as Baltic Dry Index rises 14.6%
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First Published: Thu, Feb 05 2009. 10 05 PM IST

Back in business: Cargo being loaded at the Jawaharlal Nehru Port in Navi Mumbai. Ashesh Shah / Mint
Back in business: Cargo being loaded at the Jawaharlal Nehru Port in Navi Mumbai. Ashesh Shah / Mint
Updated: Thu, Feb 05 2009. 10 05 PM IST
Bangalore: Shares of Indian shipping firms jumped on Thursday, a day after the Baltic Dry Index, the London-based measure of costs for shipping dry bulk commodities, rose 14.6% to touch 1,316 points.
This was the biggest single-day jump for the index after it started clawing its way back in early January from record lows in December.
Back in business: Cargo being loaded at the Jawaharlal Nehru Port in Navi Mumbai. Ashesh Shah / Mint
The index was buoyed by the resumption of iron ore imports by Chinese steel makers after the lunar new year holidays. This lifted the cost of hiring capesize ships to about $31,000 (Rs15 lakh) a day from about $7,000 in December.
Mercator Lines Ltd’s shares rose 23% to close at Rs31.15 on the Bombay Stock Exchange. Great Eastern Shipping Co. Ltd saw its stock climb 6.6% to end the day at Rs189.10. Shares of oil and gas carrier Varun Shipping Co. Ltd went up at least 2% to Rs47.10, while those of the state-run Shipping Corp. of India Ltd remained nearly flat at Rs83.35.
Capesize ships can carry as much as 175,000 tonnes of coal, iron ore, steel and grains and are the biggest vessels capable of carrying dry bulk commodities.
The index had plunged 92% to 663 points in December from a record 11,793 points in May after the global financial crisis and the waning demand for goods started hitting trade, lowering demand for ships.
“There has been a pretty substantial drawdown of iron ore inventories at Chinese ports,” Bharat Sheth, deputy chairman and MD of GE Shipping, had told analysts on 30 January.
Iron ore inventories at Chinese ports a few months ago were estimated at 77-78 million tonnes (mt). “The iron ore stock has now come down to about 56mt,” said Sheth.
India sells about 80mt of iron ore a year to China.
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First Published: Thu, Feb 05 2009. 10 05 PM IST