MUMBAI: Stocks of shipping companies such as Shipping Corporation, Essar Shipping and Great Eastern Shipping have been falling since April following the continuous weakness in freight rates.
Shares of Shipping Corporation and GE Shipping have fallen 14.35 per cent and 14.15 per cent, respectively in last few weeks. The main sea freight index of the Baltic Exchange, which tracks rates of ships carrying dry bulk commodities, fell for the seventh session on Tuesday, weighed down by falling rates for most vessels.
The overall index, which factors in rates for capesize, panamax, supramax and handy-size shipping vessels, fell to its lowest since early March. The index was down five points, or 0.52 per cent, at 949 points, said a Reuters report.
Analysts said, the shipping business has been affected due to excess supply that puts pressure on freight rates. Slowdown in China’s growth and fall in demand in Europe and the US have adversely impacted the business environment, they added.
A on GE Shipping said: “Increased scrapping, slow new orders, lower bunker prices and stable demand for commodities is positive for the company (GE Shipping), but we estimate that pressure of oversupply of ships to continue to keep freight rates subdued.”