Tanker rates didn't get any better in the last full week of August, and in fact they got measurably worse in five of the six tonnage categories measured by US investment bank Jefferies.
Against that backdrop, US-listed tanker owners under Jefferies coverage surged an average of 6%, helping pave the way for a strong overall performance for the 29 equities trading in New York.
Jefferies lead shipping analyst Randy Giveans has not been alone in urging investors to believe in the inevitability of a tanker market Covid-19 rebound, with colleagues like Jonathan Chappell of Evercore ISI also calling it time for punters to pile in.
To get the maximum gains from a turnaround that began long ago in dry bulk and containerships, buyers may have to get in when there is little tangible evidence that rates are better than the putrid levels of the past year.
Has that time come? Giveans thinks so.
"For tankers, they have sold off well below net asset values, and investors are now looking ahead to the fourth quarter and 2022, expecting rates to be much improved over current levels," Giveans told TradeWinds.
Of the sectors weighed by Jefferies, only LR2 product tankers actually did improve, with a substantial 26% gain to $13,069 per day.
Four of the five remaining tonnage categories plunged double digits, with VLCCs the worst in a 34% drop to $3,480.
Product tanker owners did fare the best of the group, with Scorpio Tankers adding 8.4%, Ardmore Shipping 7.9%, Capital Product Partners 7.7% and mixed-fleet owner International Seaways 7.1%.
With tankers no longer a drag, shipping stocks covered by Jefferies gained an average 9.5% on the week, topping advances of 1.5% by the S&P 500 and 5.1% by the small-cap Russell 2000 index.
The Jefferies Shipping Index is now up 63.1% year to date and 49.9% year over year.
"For the week ahead, shipping stocks are gaining momentum and could continue to gain ground. Rates remain strong in most sectors, supply-demand fundamentals continue to get better and investing sentiment has improved," Giveans said.
Dry bulk was once again shipping's star performer with the sector posting a one-week surge of 16% on Friday amid climbing rates.
Connecticut-based Eagle Bulk Shipping was top performer at 20.1% even after potential negative pressure on shares from a disclosure that second-largest holder GoldenTree Asset Management had registered to sell its remaining shareholding over time.
New York's Genco Shipping & Trading piled on 19.1%, while Diana Shipping, Safe Bulkers, Star Bulk Carriers and Navios Maritime Partners all scored double-digit gains.
