India shipping to gain from Japan $30b steel bill

NEW DELHI, May 18 (Bloomberg): Indian shipping lines stand to gain from higher iron-ore exports to China as rebuilding from Japan's earthquake signals a $30 billion jump in demand for steel. The likely rise in shipments from India, the mineral's third-largest exporter, to China, the biggest steelmaker, is among reasons to buy shares in Shipping Corporation of India Ltd. and Great Eastern Shipping Co., says Mumbai-based Centrum Broking Pvt. Ltd. About 10 per cent of a possible $300 billion recovery bill in Japan may be spent on steel products, according to Australia & New Zealand Banking Group Ltd. "The reconstruction itself will have a positive impact on Indian shipping companies in the next three to six months," said Srividhya Rajesh, a Chennai-based fund manager at Sundaram Asset Management Co. Ltd., which oversees $3.2 billion and added to its funds' holdings in Great Eastern in April. "The improvement in freight volumes will give better earnings to investors in the near term." A doubling in exports of items ranging from raw materials to pharmaceuticals is part of an Indian government strategy for boosting trade to $1.1 trillion by 2014, taking freight volumes to at least 1.3 billion metric tons from 574 million last year. Shipments of iron ore will overcome higher export taxes, Credit Suisse Group AG said. Shares in the majority state-owned Shipping Corp. may rise about 25 per cent to 134 rupees ($3) in the next 12 months, based on target prices from Siddhartha Khemka, an analyst at Centrum Broking, one of India's largest stock brokers.