An extremely busy week of earnings for major US-listed shipowners appears to have helped stocks rise across the board.
And even as reporting cools down a bit in the days ahead, US investment bank Jefferies is looking at the continuing Colonial Pipeline outage in the US as a possible boon to shares of product tanker tonnage.
The 31 shipping stocks under coverage of investment bank Jefferies posted one-week gains of an average of 6.7% on Friday, with 27 of them climbing.
Shipping once again outpaced the broader indices, as the S&P 500 gained 1.2% and the small-cap Russell 2000 index 0.2%.
The strength was spread across operating sectors.
"Tanker stocks gained an average of 7% as many tanker companies reported better than expected second-quarter rates and improved liquidity positions," said Jefferies lead shipping analyst Randy Giveans.
"This week, keep a watch on tankers as rates, especially for product tankers, should bounce on the Colonial Pipeline outage."
While there is little clarity as to the duration of the outage, a prolonged disruption could be a boost to the likes of Scorpio Tankers and Ardmore Shipping.
Major tanker names such as Euronav, Scorpio Tankers, DHT Holdings and International Seaways reported last week.
Guidance on second-quarter bookings indeed may have overshadowed rates on the week, which fell almost across the board for both clean and dirty tonnage.
Rates were better on the week for containerships and dry bulk owners, who both surged by 8%.
With the Baltic Dry Index reaching strongest levels in more than a decade, owners like Eagle Bulk Shipping, Safe Bulkers and Genco Shipping & Trading were able to trumpet continuing strength on second-quarter bookings and gathering momentum in the charter market.
In the gas sector, LPG fared best with a gain of 12%, while LNG shipowners ticked up 2%.
The shipping rally was so broad-based that the top five performers each represented a different sector: Star Bulk Carriers jumped 21%; containership provider Danaos saw its shares rise 21% in a week; a crude tanker owner, International Seaways jumped 16%; LPG operator StealthGas rose 14%, and a product tanker owner Ardmore leapt 12%.
"For the week ahead, we expect a lot more activity in shipping as earnings season ramps up, the BDI keeps climbing, and products tanker rates see lots of movement as a result of the Colonial Pipeline outage," Giveans said.
Major names to report before Friday include Global Ship Lease, Danaos, Ship Finance International, Teekay Tankers and Teekay LNG Partners.
The Jefferies Shipping Index is up 62% on the year and 36% year over year.
