Oct. 23 (Bloomberg) -- Kawasaki Kisen Kaisha Ltd., Japan's third-largest shipping company, plunged to a five-year low in Tokyo trading, leading Asian shippers lower, on concern demand to move commodities will wane.

Kawasaki Kisen fell 5.5 percent to 380 yen at the close of trading. That's the lowest since Oct. 1, 2003. STX Pan Ocean Co., Nippon Yusen K.K. and other sea-cargo movers also declined amid an overall plunge in Asian stocks.

The Baltic Dry Index, a measure of commodity-shipping rates, fell to the lowest in more than six years in London yesterday as slowing economic growth cuts demand to move coal, iron ore and steel. Commodity shippers will begin to collapse within the next six months and ``significant'' numbers may fail within two years, according to Fearnley Fonds ASA, a specialized maritime investment bank.

``Demand for commodities is definitely slowing down,'' Yu Mengguo, a senior analyst at Jinpeng International Futures Co., said in a phone interview from Beijing today. ``That's being reflected in tumbling prices, which we can't see the bottom for right now.''

Commodity prices are slumping worldwide on speculation a global economic slowdown will reduce demand. The Reuters/Jefferies CRB Index, which tracks commodity futures prices for 19 raw materials, plunged to the lowest in four years yesterday.

Baltic Index

The Baltic Dry Index fell 66 percent in the three months to Sept. 30, the largest quarterly drop since the exchange began compiling the data. The measure of commodity-shipping costs is down 62 percent so far this month at 1,221 points, after rising to a record high of 11,793 points on May 20. It fell for a 13th consecutive day yesterday.

Nippon Yusen, Japan's largest shipping line, fell 2.1 percent to 415 yen in Tokyo, the lowest since Dec. 11, 2003. STX Pan Ocean, South Korea's largest bulk-shipping line, plunged 11 percent in Singapore trading to 85.5 Singapore cents, the lowest since Nov. 22, 2006. Hanjin Shipping Co. fell 15 percent to 13,400 won in Seoul, its lowest level in more than four years.

Record declines in rates for ships to carry coal, ore and grain mean owners won't be able to pay for outstanding orders for new vessels, Rikard Vabo, an Oslo-based analyst at Fearnley said yesterday. Shippers, expecting a surge in demand in emerging economies, spurred the biggest shipbuilding program in history before a world economic slowdown began.

Container shipping lines also declined. Neptune Orient Lines Ltd., Southeast Asia's largest sea-box carrier, plunged 10 Percent to S$1.16, the lowest level in more than five years. Orient Overseas International Ltd., Hong Kong's largest container line, dropped 10 percent to HK$12.74.

``As the financial crisis worsens, it will be reflected in economic growth,'' said Yu. ``Commodities being a function of consumption will continue to trend lower as a slowdown starts to curb demand.''

To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net

Last Updated: October 23, 2008 06:08 EDT