Mercator Lines (Singapore) sank deeper into the red in the second quarter of 2013 as revenue plunged amid the sluggish dry bulk shipping market.

In the quarter ended 30 September 2013, Mercator Lines reported a net loss of $5.43m compared to a loss of $232,000 in the same period of last year.

Revenue for the quarter dropped 40% year-on-year to $21.42m due mainly to a fall in shipping spot rates, termination of charter in vessels, disposal of vessel and new contracts at rates lower than the previous rates.

Shalabh Mittal, managing director and ceo of Mercator Lines, believed that the dry bulk shipping market is showing some signs of recovery as the Baltic Dry Index (BDI) has gradually strengthened and asset prices have also increased by more than 10% over the last six months.

“Slowdown in deliveries and newbuildings, high scrapping, combined with a gradual recovery in world economy with sustain demand from Chinese economy should bode well for dry bulk shipping industry going forward,” Mittal said, but adding that the company is cautiously optimistic on the prospects of the industry.