HONG KONG AND SINGAPORE—STX Pan Ocean Co., South Korea’s largest shipping line for iron ore and coal, rose the most in almost two months in Singapore trading after Merrill Lynch & Co. raised its target price for the company, citing surging bulk rates.

The shipping line gained 7.6 percent to S$3.99 during midmorning trading in Singapore on Tuesday. Merrill raised its price target 35 percent to S$5.00 in a note to clients on Tuesday.

The bank also lifted its profit forecast for STX Pan Ocean by 52 percent as shipping rates rise because of China’s demand for iron ore and coal, the Southern Hemisphere grain season and a lack of new vessels. The Baltic Dry index—a measure of rates—closed at a record high for the third day in a row Monday.

“We expect favorable conditions to persist for the remainder of 2008,” analysts Paul Dewberry and Ying Ying Hou said in the note. They maintained a “buy” rating.

The Seoul-based shipping line is likely to make a full-year adjusted net income of $778 million, they added.

The Baltic index climbed 2.2 percent on Monday to 11,709, a third-straight record close. STX Pan Ocean’s Seoul-listed shares fell 1.6 percent to 3,065 won at in late morning trading in Seoul on Tuesday.

Cosco Corp. Singapore Ltd., the ship-repair and bulk-carrier unit of China’s largest shipping line, gained 9 cents, or 2.5 percent, to S$3.65.

Courage Marine Group Ltd., a Singapore-based shipping company, rose 1 Singapore cent, or 2.4 percent, to 43.5 cents, set for its highest since November 16, 2007. (Bloomberg)

BIR to clarify logistics tax for airlines

THE Bureau of Internal Revenue (BIR) said it will issue a circular clarifying how airlines, including freight forwarders, should pay their taxes, in a move to correct misconceptions on the logistics industry’s documentation and payment procedures.

NEW YORK—DryShips Inc., a Greek owner of ships that haul iron ore and coal, said first-quarter profit more than doubled on higher shipping rates and a larger fleet.

TOKYO—Mitsui Engineering & Shipbuilding Co., Japan’s second-largest shipbuilder, climbed to the highest in four months in Tokyo trading after bulk-carrier freight rates rose to a record, boosting optimism vessel prices will increase.

HONG KONG AND SINGAPORE—STX Pan Ocean Co., South Korea’s largest shipping line for iron ore and coal, rose the most in almost two months in Singapore trading after Merrill Lynch & Co. raised its target price for the company, citing surging bulk rates.

LONDON—The Baltic Dry index, a measure of shipping costs for commodities, rose to a record for a third consecutive trading session on a shortage of capesize vessels to haul iron ore and coal.