US-listed shipping stocks witnessed a major sell-off on Thursday amid poor sets of results and fears over a potentially protracted trade war.
Dorian LPG was among the day’s biggest losers with its shares ending the day down 16.5% to $6.79 per share after hitting an intra-day low of $6.62.
Earlier in the day, the company posted a fourth quarter loss of almost $16m against a loss 12 months ago of just $3.4m.
John Fredriksen’s Seadrill was another stock to suffer, with its share price ending the day down almost 23%, while MLP spin-off Seadrill Partners was down 16.3%.
In the drybulk space Scorpio Bulkers and Star Bulk Carrier were among the worst effected ending the day down over 10% each.
At one stake Star Bulk’s shares were down almost 20% to an intra-day low $6.62 on the day before recovering to $7.28 per share.
“The entire dry bulk group sold off sharply behind rising US – China trade tensions,” said Deutsche Bank shipping analyst Amit Mehrotra said in a note Thursday.
“We note there has been very little US – China dry bulk trade over the last six to nine months and thus we see minimal impact to market fundamentals.
“Nonetheless, the news continues to drive market sentiment, presenting headline risk for the group. While trade discussions have deteriorated, spot rates continue to rally from first quarter lows.
“The recovery has been particularly encouraging for the capesize segment given continued Vale headwinds and Chinese iron ore inventory drawdowns.”
Tanker stocks did not escape the sell-off with Teekay Tankers ending the day almost 10% lower at $1.22 per share.
Ardmore Shipping lost almost 8% of its value during Thursday’s trading day, while a number of other well-known names lost up to 5% of their share value.
Crude oil suffered its worst trading session of the year with July West Texas Intermediate (WTI) crude was 5.7% lower at a two-month low of $57.91 per barrel, while Brent sank 4.5% to close at $67.76 per barrel. WTI settled below its 200-day moving average for the first time since early April.
“It seems like we’re going to be entrenched in a trade war, which is really going to hurt demand for crude oil,” Tariq Zahir, a commodity fund manager at Tyche Capital Advisors told Bloomberg.
