Bloomberg reported that China Cosco Holdings Co and Mitsui OSK. Lines Ltd led declines among Asian bulk-shippers as transport rates fell after an iron ore producer demanded higher prices.
China Cosco declined as much as 7.9% to HKD 10.78 as of 10:10 AM in Hong Kong. Mitsui, Japan's largest operator of iron ore ships declined as much as 5.3% to JPY 1,022 and traded at JPY 1,058 as of the morning close of trade in Tokyo.
According to two people familiar with the negotiations, the Baltic Dry Index, a measure of commodity shipping costs tumbled to its lowest in 15 months. Brazil's Cia Vale do Rio Doce, the biggest iron ore producer has asked Nippon Steel Corp and rivals to pay 12% more for the material.
Mr Takuya Osaka an analyst in Tokyo at Morgan Stanley Japan Securities Co said that “Shipping stocks are very highly correlated with the Baltic index. The negotiations are adding to the decline.''
Mitsui O.S.K made 91.9% of its operating income from shipping commodities last fiscal year. China Shipping Development Co, China's biggest oil carrier fell as much as 5% to HKD 13.20 in Hong Kong. Neptune Orient Lines Ltd, Southeast Asia's largest sea cargo carrier, dropped as much as 5.2% to USD 2.01 in Singapore.
