It was another week of outsized performance for US-listed shipping stocks against broader market indices, but tanker entries were no longer able to defy the gravity of loss-making spot rates.
The 30 stocks under coverage of investment bank Jefferies gained an average 4% last week, continuing a hot start to 2021. The S&P 500 dropped 1.5% on the week while the small-cap Russell 2000 index gained 1.5%.
However, one week after shrugging off continued trough earnings levels, the 10 tanker owners under coverage of Jefferies lead shipping analyst Randy Giveans dropped 2%.
"It was the only down sector as VLCC rates fell hard following the week's prior Saudi announcement, which is now weighing on the first-half outlook," Giveans told TradeWinds.
Giveans alluded to Saudi Arabia's surprise reduction of crude output by 1m barrels per day for February and March, which has undercut tanker demand.
As TradeWinds has reported, the Baltic Exchange estimated VLCC earnings for the TD3C benchmark Middle East Gulf-China trade at $3,163 per day on Friday, the lowest since the assessment began in February 2017.
This was also down 70% from $10,667 per day on 8 January.
VLCC-heavy Frontline was among the week's biggest losers with a 4.7% drop, while International Seaways and Euronav each fell 2.7% and DHT Holdings 0.7%.
Mixed-fleet owner Diamond S Shipping tumbled 5.4% while clean-trading Ardmore Shipping gave up 2.7%.
But there was plenty of good news as well, led by a 17% gain from LNG names.
The stocks were helped only by rates and prices that continue to rise, but also by New Fortress Energy's $5bn agreement to buy Golar LNG Partners and its Hygo Energy Transition — a 50:50 joint venture between Golar LNG and Stonepeak Infrastructure Partners.
"Golar LNG Partners remained elevated due to the all-cash acquisition at $3.55 per unit," Giveans said. "Golar LNG popped on the announcement but sold off in subsequent days, as the underlying New Fortress shares fell 25% after reaching an all-time high of $65.90 on the initial announcement on Wednesday."
Golar LNG Partners still finished the week as shipping's top gainer with a 27.8% boost, narrowly topping GasLog Partners' 26.6% gain. Golar LNG retained a 7.8% hike.
All other operating sectors finished up, with containerships adding 4%, dry bulk 3% and LPG 1%.
The dry trade gainers included Navios Maritime Partners at 17.2% and Eagle Bulk Shipping at 8.5%.
