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Recent Performance of Shipping Stocks in 2022

Views: 10     Author: Site Editor     Publish Time: 2022-03-30      Origin: Site

The geopolitical situation will change the flow of global trade in the coming period, which will have a huge impact on the direction of shipping stocks. In the past month, shipping stocks have seen sharp fluctuations, more than the overall level of the stock market. Randy Givens, an analyst at investment bank Jefferies, said that part of the reason is that the industry is stuck in a supply chain impasse, and it is difficult to say how the future trade pattern and route planning will change.


-Container Stock-

Negative sentiment in the container shipping sector is growing. Global inflation is accelerating, the European economy is likely to decline, the US consumer confidence is facing downside risks, and container spot freight rates have declined.


Even so, container shipping stocks continued to strengthen. Givens said container ship lessors are less vulnerable to market news because they have locked in cash flow for three to five years by signing high-priced charter contracts one after another.


Danaos (NYSE: DAC) is up 11% in a month and 37% year-to-date; Costamare (NYSE: CMRE) is up 23% month-over-month and 35% year-to-date; Global Ship Lease (NYSE: CMRE) GSL) rose 13% month-on-month and 24% year-to-date.
Recent Performance of Container Stocks in 2022

In contrast, liner operators are more vulnerable to indirect impacts. But even so, Matson (NYSE: MATX) shares are up 15% in a month and 34% year-to-date; Zim (NYSE: ZIM) shares (based on last Tuesday's dividend-adjusted closing price) month-over-month It is up 33% and is up 51% so far this year.


In Zim's case, Givens said, the company reported strong earnings, upbeat forecasts and a dividend that was well above expectations. And investors believe that port congestion will continue, which has supported shares.



-Dry Bulk Stock-

Demand for Panamax (65,000-99,999 dwt) and post-Panamax (50,000-59,999 dwt) dry bulk carriers may not be able to be fully replaced by other sources due to the blockage of bulk agricultural exports from Ukraine and Russia. reduce. The repeated outbreak of the epidemic has suppressed the demand for capesize ships (180,000 dwt), but Europe needs to replace Russian coal with coal from other sources such as Asia, which is a positive factor for capesize ships.


Some dry bulk shipping stocks posted double-digit gains in the face of a mixed set of factors. Genco Shipping & Trading (NYSE: GNK) is up 19% month-over-month and up 45% year-to-date; Eagle Bulk (NASDAQ: EGLE) is up 15% month-over-month and up 41% year-to-date; Star Bulk (NASDAQ: SBLK) It was down 2% month-on-month and up 30% so far this year.
Recent Performance of Container Stocks in 2022_2

Givens noted that Genco, Star Bulk and Eagle all have healthy balance sheets, and all three have high scrubber installations in their fleets. At present, the price of oil remains high, the difference between high and low sulfur oil prices continues to widen, and the economics of desulfurization towers are further improved.



-Tanker Stock-


Tanker stocks have had a mixed performance over the past month. Some listed companies with VLCCs are underperforming: Euronav (NYSE: EURN) is down 3% month-on-month, but up 13% year-to-date; DHT (NYSE: DHT) is down 3% month-to-date, but up year-to-date 5%; Frontline (NYSE: FRO) is down 3% month-over-month, but is up 17% year-to-date.
Recent Performance of Container Stocks in 2022_3

Givens said the COVID-19 situation is quite detrimental to scrubber-free, non-environmentally friendly VLCCs. More Russian crude oil will flow to China and India, and Western Europe will increase crude oil imports from the United States, Latin America and the Middle East. But such a change will take time. Givens is fairly bullish on crude shipping stocks in 2023, although there could be some headwinds in the coming months.


Compared to crude oil tankers, stocks of product tankers have fared much better. Scorpio Tankers (NYSE: STNG) rose 26% month-on-month and 56% year-to-date; Ardmore Shipping (NYSE: ASC) rose 6% month-on-month and 31% year-to-date; Oslo-listed Hafnia shares rose month-on-month 13%, up 21% so far this year.


Givens pointed out that the product tanker segment has outperformed the crude oil tanker segment as Western Europe began to import diesel from further afield, demand for ton-miles rose.



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