Friday, May 22, 2009

Asian shipping stocks rebounding in 2009

One of China's top shippers of dry bulk fleet hit an eight-month high on 20th May

Worldwide shipping has been hit hard by the global economic recession, but could Asian shipping stocks be experiencing a rebound?

The Baltic Exchange's main sea freight index, BADI, which tracks rates to ship resources and includes the shipment of grain, coal, iron ore, cement, and fertiliser, rose 14 straight days to 2,665 points on Thursday to a new year high.

Goldman Sachs have also upgraded their container ship stance from 'neutral' to 'attractive'. A source from Goldman Sachs quoted "Japan and Korea shipping stocks have also underperformed China's shipping sector even though the industry drivers are global".

Geoffrey Cheng at Daiwa Institute of Research recommended speculative buying of bulk shipping stocks "It seems that traders are continuing to import iron ore, coal and other soft commodities."

China's continued purchases of imported iron ore ahead of the annual sales agreement between its domestic steel makers and Australian miners has boosted dry bulk freight rates, but prices can drop once the stocking process ends.