India Shipping Corp to buy 29 vessels for $781 mln-exec

Fri Jun 3, 2011 4:41am EDT
* Aims to take delivery of 17 ships this fiscal
* Shipping Corp's FY11 iron ore shipments down 13 pct y/y
* Chinese firm to buy up to 15 pct more Indian iron ore in 2011
By Ratnajyoti Dutta

NEW DELHI, June 3 (Reuters) - State-run Shipping Corp of India has ordered 29 vessels including bulk carriers and tankers for 35 billion rupees ($781 million), which would boost its fleet by 37 percent, a company executive said on Friday.

The company aims to take delivery of 17 vessels -- including two in July -- in the current fiscal year ending March, Sunil Thapar, director of the bulk carriers and tankers division, told reporters at a conference.

He said SCI, which currently has 79 ships, was formulating a strategy to strengthen its fleet and aims to also buy platform supply vessels and offshore supply vessels.

"We are devising a strategy to buy more ships over and above what have been decided so far," Thapar said.

He said SCI's iron ore shipments declined an annual 13 percent to 87.3 million tonnes in 2010/11, following a ban by southern Karnataka state on export of the major steel making raw material.

The state -- supplier of about a quarter of India's iron ore shipments -- had banned the shipments from 10 ports and stopped its transport to other ports for exports in July last year. It lifted the ban this April.

China is the top buyer of Indian iron ore but it has recently raised quality concerns.

However, Bright Ruby Resources, a key Chinese client for Indian iron ore, said it plans to buy up to 15 percent more from India in 2011 from 8 million tonnes in 2010.

"We are looking at low grade iron ore from Goa," said Victor Wang, vice-president at resource purchase department of Bright Ruby Resources.

Goa, located in western India, is one of the biggest Indian iron ore exporting ports.

He said current delivered iron ore prices of about $176/tonnes in China are expected to ease in one to two months by about $10/tonne. ($1 = 44.825 Indian Rupees)
(Reporting by Ratnajyoti Dutta; Editing by Aradhana Aravindan, sourced Reuters)