As earnings season tails off for US-listed shipowners, investors are bidding a rude farewell to stocks across operating sectors.
The 30 listed shipowners under coverage of investment bank Jefferies finished Friday with a one-week plunge of 6.3%, underperforming both the S&P 500's 0.3% gain and a 2.8% drop by the small-cap Russell 2000 index.
The carnage was worst in tankers, where investors who seem to be looking past short-term gains from VLCCs and LR2s sent the group down 11% over the week.
"Clearly the negative headlines and commentary from OPEC+ and the IEA in regards to demand in 2022 have reduced sentiment for tankers," said Jefferies lead shipping analyst Randy Giveans.
OPEC is monitoring signs of an oil supply surplus building from December and counselled members to be "very, very cautious" in output reviews, according to Reuters reports.
“The surplus is already beginning in December,” Opec secretary general Mohammad Barkindo said on the sidelines of an energy conference, when asked if he was sure there would be an excess in oil supply next year.
"The tankers were taken down by the crude selloff and the European lockdowns in Austria and possibly Germany," Giveans told TradeWinds.
"Covid flare-ups and demand uncertainty are causing concern regarding the timing and degree of sustained rate improvement next year."
Tanker owners made up four of the bottom five individual performers during the week, with clean products giant Scorpio Tankers diving 17.2%, International Seaways 14.1%, Teekay Tankers 13.9% and Frontline 13.8%.
But no one had a worse week in share performance than a dry bulk owner, Diana Shipping of Greece, which plummeted 18.1%. The dry sector average a drop of 8% overall as rates fell off again.
Investors appeared less than convinced by Diana's decision to spin off three older bulkers into a separate pubic entity called OceanPal.
Despite Diana's decision to award a $0.10 per share dividend on the spinoff, investors appeared to be looking for more as some of Diana's dry bulk peers have instituted aggressive dividend policies.
"DSX earnings were underwhelming and the spin of OceanPal has not been very well received," Giveans said, referring to the company by its shares' ticker symbol.
"Most investors would prefer to see asset sales and share repurchases instead of owning a small, illiquid dry bulk stock like OceanPal will be."
Diana announced a tender offer to repurchase about 4% of its shares on Monday.
The only positive sector on the week was containerships with an average 1% gain.
Boxships were led by Israeli liner company Zim, which with a 13.9% appreciation more than doubled the gain of any other listing.
Zim lifted adjusted Ebitda guidance for the full year to between $6.2bn and $6.4bn after recording its strongest quarter ever.
Shipping's weakness extended to the gas sector, where LNG shipping listings dropped an average 3% despite continued gain in rates that in some cases approached record highs.
LPG carrier owners also saw rates gains, but an average drop of 5% on the week.
