Indian shipping lines stand to gain from higher iron ore exports to China as rebuilding from Japan’s earthquake signals a USD 30 billion jump in demand for steel.
Mumbai based Centrum Broking Pvt. Ltd said that the likely rise in shipments from India, the mineral’s third largest exporter, to China, the biggest steelmaker, is among reasons to buy shares in Shipping Corporation of India Ltd and Great Eastern Shipping Co.
About 10% of a possible USD 300 billion recovery bill in Japan may be spent on steel products, according to Australia & New Zealand Banking Group Ltd.
Mr Srividhya Rajesh a Chennai based fund manager at Sundaram Asset Management Co Ltd said that “The reconstruction itself will have a positive impact on Indian shipping companies in the next three to six months and added to its funds’ holdings in Great Eastern in April. The improvement in freight volumes will give better earnings to investors in the near term.”
Credit Suisse Group AG said that a doubling in exports of items ranging from raw materials to pharmaceuticals is part of an Indian government strategy for boosting trade to USD 1.1 trillion by 2014, taking freight volumes to at least 1.3 billion metric tonnes from 574 million last year. Shipments of iron ore will overcome higher export taxes.
Mr Siddhartha Khemka an analyst at Centrum Broking, one of India’s largest stock brokers said that “The demand for iron ore will increase when Japan starts rebuilding and there will be an increase in freight movement since India is one of the major exporters. Efforts by the government to boost overall Indian exports will also be positive for all shipping firms.”
( Source: www.steelguru.com )