STX Pan Ocean , a South Korean shipping firm, said on Wednesday that its quarterly profit slumped 97 percent after its business was hit by lower bulk freight rates.Singapore-listed STX, which derives most of its profit from shipping bulk cargo such as coal, grains and ore, said in a statement it earned third-quarter net profit of $1.7 million, down sharply from $62.8 million a year ago.STX said in August that its second-quarter net profit slumped 96 percent to $4.6 million as an oversupply of new vessels hit freight rates.But it said at the time that the industry outlook for 2007 was "more exciting than possibly at any time in history" due to rising demand for coal and steel fueled by China's booming economy.The company, South Korea's biggest dry bulk shipping company, is looking to reduce its dependence on dry bulk, its main money spinner, because the business is closely tied to China's appetite for raw materials, particularly ore used in steel production.
The Baltic Dry Index , which tracks bulk shipping rates, has climbed 75 percent since the start of the year to 4,214 points. In May, STX had predicted the index would stay at around 2,500 points for the rest of 2006. The index fell sharply from a high of more than 6,200 in December 2004 to less than 1,800 in August 2005 as China's ore imports fell.STX shares, which were sold at S$0.90 each in July last year when the firm listed in Singapore, have fallen 8 percent since the start of this year, valuing the group at around $910 million.