Shipping stocks in New York and Europe plummeted on Thursday and early Friday after reports of a possible ceasefire in Gaza.
Al Jazeera reported (then retracted) the news that Qatar had brokered a ceasefire on Thursday afternoon between Israel and Hamas.
The market appeared to assume a ceasefire would lead Yemen’s Houthi militia to halt attacks on vessels in the Red Sea. The attacks, intended to pressure Israel to halt its assault on Gaza, have resulted in soaring shipping rates and tonne-miles across most segments as vessels reroute around the Cape of Good Hope.
Shares in Israeli container liner Zim plunged 12% on the New York Stock Exchange at one point.
Scorpio Tankers shares dropped 3.8%, while Teekay Tankers closed 2.9% down.
In Norway, the Oslo shipping index was down about 2.2% on Friday. The index, which consists of 23 shipping stocks, is up about 9% so far this year.
Frontline shares fell as much as 4.7% in Oslo, reflecting yesterday’s drop in New York.
LPG stocks were also dragged down by falling spot rates. On Thursday, VLGC spot rates plunged 96% from the peak last year.
BW LPG shares lost as much as 3.8% and Avance Gas sank 3.1%.
Norwegian broker Fearnley Securities said: “The freight market is still searching for a floor”.
Fearnleys does not “foresee any turnaround in the immediate short term for VLGC freight”.
Referring to Dorian LPG, analysts Oystein Vaagen and Fredrik Dybwad said first-quarter earnings will be somewhat insulated from the current rate slump, although second-quarter earnings are when the pain should become visible, at least as long as the current market downturn persists.
In Copenhagen, B shares of AP Moller-Maersk traded down about 1.5%.
