Shipping companies sail high

Shipping companies are on a roll today, led by Essar Shipping, which is up over 3.2% at Rs.20.50, its current intra day high. Mercator, Shipping Corp of India, Bharati Shipyard, Varun Shipping, GE Shipping; all are in the green.

The reason for this sudden spike up in shipping stocks is thanks to the directive issued by the Govt of India to GAIL, stating that it should use Indian ships for importing gas worth $2.5billion per annum from the US markets. This move is expected to give impetus to the Indian shipping industry.

Govt data says that GAIL would require at least five ships to bring in 5.8 mtpa of pas from USA, starting Sept’17. There is news that a major jump in LNG imports is expected and this means shipyards could soon get busy building these LNG carriers. We could hear of foreign tie-ups here as building LNG carriers requires a lot of expertise and South Korea leads this market, followed by China and Japan.