Shares of Israeli liner operator Zim soared more than 6% to a 52-week high of $26.20 in the first hours of trading on the New York Stock Exchange after it was confirmed that a port strike on the US East Coast and Gulf of Mexico will go ahead from Tuesday.
Zim is the prime pick of the US-listed container shares to benefit from additional disruption in the view of US investment bank Jefferies, and investors were active, trading nearly 6m units by mid-afternoon against the company’s average volume of 5.3m.
Shares cooled slightly in trading later on Monday, but were still roughly 5% to the good.
Jefferies lead shipping analyst Omar Nokta told clients in a note on Monday: “We estimate roughly 10% of all container trade moves through the region including the Asia-US East Coast routes and Transatlantic, along with their back-haul trades.
“As we noted last week, government intervention may be needed should a strike extend beyond a few days, but thus far there appears to be no public signs that the Biden Administration is involved.”
The other stocks cited by Nokta as potentially benefiting from the disruption showed differing results.
Shares of AP Moller-Maersk climbed more than 4% in Copenhagen earlier on Monday, closing at DKK 11,260 ($1,681). But shares of Germany’s Hapag-Lloyd fell fractionally in Frankfurt.
In the Oslo market, the stock of MPC Container Ships gained about 3% to NOK 24.35 ($2.31).
“In today’s market, ports across the US are running at or near record throughput levels while ships are in tight supply due to Red Sea diversions and surprisingly strong demand,” Jefferies told clients in an earlier note.
“Ocean carriers are minimising capacity availability into the US East Coast and US Gulf Coast, and have announced sizeable port disruption surcharges in the event of a strike.”
In another research note on Monday, analysts at Clarksons Securities noted that container ship stocks already had been on the rise last week, leading all shipping gainers with a jump of 9%.
“Container shipping stocks also stand to gain from potential disruptions to US port operations, where possible congestion and supply chain issues may support higher freight rates in the near term,” they wrote.
“While attacks in the Red Sea have eased, tensions in the Middle East remain elevated, and diversions around Africa are expected to continue.
“Rising vessel values are an emerging trend in the containership industry, and with longer charter opportunities available, tonnage providers are seeing increased asset backing.”
