STX Pan Ocean Co, South Korea's largest commodities shipping line, said it will buy three bulk carriers for US$257 million to meet demand for moving iron ore, coal and other commodities.
The three capesize vessels, the biggest of their type, will be built at a shipyard in China and will require investment until 2010, the Seoul-based company said in a regulatory filing in South Korea yesterday.
Bulk shipping lines such as Pacific Basin Shipping Ltd and STX Pan Ocean have more than doubled rates in the past year because of rising imports of iron ore, grain and coal into China and India. The companies have ordered more vessels this year to meet the demand.
STX Pan Ocean has said it plans to spend about US$800 million on 16 ships this year after China's surging demand for raw materials caused cargo fees to more than double. The company operated as many as 350 vessels as of Sept 30.
The Baltic Dry Index, an overall measure of the cost of transporting commodities, traded at 9,897 as of Tuesday, more than doubling this year, according to the London-based Baltic Exchange.
Annual demand for iron ore in China, the world's largest steelmaker, may rise to more than 1 billion metric tons, from about 713 million tons this year, as demand for steel gains, Jim Lennon, senior commodities analyst at Macquarie Group Ltd, said on Tuesday.
STX Pan Ocean dropped 4 per cent to 3,750 won in Seoul trading. The shares fell 6.9 per cent to S$2.68 in Singapore.
The three capesize vessels, the biggest of their type, will be built at a shipyard in China and will require investment until 2010, the Seoul-based company said in a regulatory filing in South Korea yesterday.
Bulk shipping lines such as Pacific Basin Shipping Ltd and STX Pan Ocean have more than doubled rates in the past year because of rising imports of iron ore, grain and coal into China and India. The companies have ordered more vessels this year to meet the demand.
STX Pan Ocean has said it plans to spend about US$800 million on 16 ships this year after China's surging demand for raw materials caused cargo fees to more than double. The company operated as many as 350 vessels as of Sept 30.
The Baltic Dry Index, an overall measure of the cost of transporting commodities, traded at 9,897 as of Tuesday, more than doubling this year, according to the London-based Baltic Exchange.
Annual demand for iron ore in China, the world's largest steelmaker, may rise to more than 1 billion metric tons, from about 713 million tons this year, as demand for steel gains, Jim Lennon, senior commodities analyst at Macquarie Group Ltd, said on Tuesday.
STX Pan Ocean dropped 4 per cent to 3,750 won in Seoul trading. The shares fell 6.9 per cent to S$2.68 in Singapore.