It was a week when dry bulk rates went one way — up — and New York-listed bulker equities headed the other.
Investor anxiety over waning US stimulus activity and Covid-19 spread overcame even the highest Baltic Dry Index (BDI) level since 2010 and capesize rates approaching $50,000 per day for the first time in a decade.
That sent dry bulk equities under the coverage of investment bank Jefferies into a one-week declined of 2% on Friday, nearly mirroring the 2.2% drop for all 29 shipping stocks under the bank's coverage.
Shipping fared worse than the S&P 500, which lost 0.6%, yet slightly better than the small-cap Russell 2000 index, which shed 2.5%. Nonetheless, the Jefferies Shipping Index remains up 46.5% year to date and 31.2% year over year.
"For the week ahead, we expect a light week of trading as we enter the homestretch of summer vacation," Jefferies lead shipping analyst Randy Giveans said.
"That said, stocks could remain volatile in the ongoing tug-of-war between positive rates and fundamentals and negative Covid and macro-economic concerns."
Much of the week's hit to shipping came on 19 August, when investors reacted to minutes of the US Federal Reserve's July meeting, suggesting a bond asset-purchase programme launched at the outset of the Covid-19 outbreak could begin to wind down later this year.
There was also uncertainty over whether the spread of the Covid-19 Delta variant could cause further lockdowns despite progress made in vaccinating much of the population.
The jitters overwhelmed positive industry fundamentals, Giveans said then.
"Also, it is a lot easier and safer for a portfolio manager to sell from the beach in August than to buy" he said.
"'Sell now and we will sort it out in September' has probably been heard with waves in the background."
Only six of the 29 Jefferies stocks registered gains for the week.
Tankers also lost 2% amid gains in crude rates and declines in clean products. Frontline —one of the tanker sector's bellwethers — is to be among the final companies to report second-quarter earnings this week.
Gas stocks fell to losses despite stability or gains in underlying rates, as LNG operators declined 4% and LPG owners 7%.
Only the mighty containership sector managed to eke out a gain on the week at 1%.
Boxship owners made up half of the companies gaining ground, with Danaos leading the way at 7.5%, followed by Zim at 3.7% and Capital Product Partners at 0.3%.
