US-listed shipping stocks still have gaudy overall gains thus far in 2021 as investors regain interest in the trade, but the past two weeks have seen a pause in the momentum.
The 32 New York listings under the coverage of investment bank Jefferies ended Friday with a 0.9% decline over the prior week.
It was the the second straight week that they underperformed the S&P 500, which logged a 1.4% gain.
The Jefferies stocks also performed worse than the small-cap Russell 2000 index, which saw a 0.9% gain.
Jefferies lead shipping analyst Randy Giveans has been bullish on the sector as a favourite recovery trade for investors on the full year, and wasn't blinking based on the slow fortnight.
"We are still a couple weeks away from the shipping earnings season, so it should be a relatively quiet week," he said.
"That said, rates and asset values are rising, so investors remain interested in the sector, with plenty starting to position their investments ahead of earnings."
With the exception of LNG stocks, shipping equities hewed closely to movements in hire rates across the board.
Tankers, which have largely traded in close correlation with the energy sector in 2021, decoupled from that trend and followed rates down by 4%.
Pending merger partners Diamond S Shipping and International Seaways were among the biggest losers, with Connecticut's Diamond S slumping 7.4% and its New York peer falling 6%. Teekay Tankers dropped 6.3%, while major crude tanker names Euronav and DHT Holdings both stumbled 4.5%.
On the crude side, the week saw a 26% drop in suezmax rates and a 56% plunge for aframaxes, even as VLCCs ticked up 3%. In clean products, previously resurgent LR2 rates crashed down 34% with LR1s diving 23% and MRs dipping 5%.
Dry bulk saw a more positive move, as shipowners gained an average 3%. Greek owner Star Bulk Carriers, which has been widely tipped to restore a shareholder dividend within 2021, led all gainers with a 8.3% rally. Genco Shipping & Trading's 8.2% jump and Safe Bulkers' 4.9% gain put them also in the top five.
Capesize rates led the way with a 25% surge on the week, with kamsarmaxes up 9% and supramaxes climbing 4%.
Another sector with strengthening rates, containerships, eked out a 1% average gain, with Capital Product Partners leading the way at 3.4%.
LNG owners bucked the trend with a 2% loss even with further gains that have rates now up 60% since hitting a low of $30,000 per day in March.
Even after the slow week, the Jefferies shipping stocks are up 37.5% year to date and 21% year over year.
Giveans remains confident that rising asset values will underpin further gains.
"The tanker S&P market remains robust, with more than 105 tankers sold in the secondhand market so far this year as owners look to a stronger market later this year," he told TradeWinds.
On the dry side, the average valuation for a five-year-old bulker is up 25% year to date, he said.
Corresponding valuations for containerships are up 15% to 35% across size categories on stronger rates, he said.
