The latest Drewry Maritime Equity Indices for the week ending 6 September 2024 reveal significant fluctuations in global shipping markets, with varying performances across different shipping sectors. While some sectors rebounded, others continue to struggle amid broader market volatility. Here’s a breakdown of the major developments from the report.
Port and Terminal Operators See a Positive Uptick
The Drewry Port Equity Index (DPEI) experienced a notable increase of 1.9% week-on-week (WoW), signaling a recovery after previous declines. This marks an encouraging rise, particularly for Global Terminal Operators (GTOs), which saw a stronger increase of 2.8%, while Regional Terminal Operators (RTOs) saw a slight dip of 0.3%. Despite these mixed results, the year-to-date (YTD) increase for DPEI stands at 11.7%, with GTOs up 15.6% and RTOs rising by 2.8%. In comparison, the S&P 500 dropped 4.2% WoW, though it remains up 13.4% YTD. This performance divergence highlights the resilience of global terminal operations in an otherwise shaky equity environment.
Container Shipping Struggles Amid Downward Trend
The Drewry Container Shipping Equity Index faced significant headwinds, declining 5.5% WoW. This decrease mirrors a broader, sustained downtrend in the container shipping sector, with spot rates continuing to drop for the seventh consecutive week. The Drewry World Container Index (WCI) also fell by 7.8% WoW, further cementing the challenges faced by container shipping companies. While the S&P 500 similarly saw a WoW decline, it outperformed both the Drewry Container Shipping Index and the WCI, underscoring the ongoing struggles in the container market. YTD, the Container Shipping Equity Index has only risen by 1.4%, which pales in comparison to the S&P 500’s broader market strength.
Dry Bulk Shipping Takes a Hit
Dry bulk shipping also found itself in the red, with the Drewry Dry Bulk Equity Index dropping 6.7% WoW. This decline came in tandem with a global equity sell-off that affected several sectors. In comparison, the S&P 500 actually rose 4.2% WoW, further amplifying the underperformance of the dry bulk sector. When examining the YTD figures, the Drewry Dry Bulk Index has dropped 1.1%, contrasting sharply with the S&P 500’s YTD gain of 13.4%. These numbers illustrate the ongoing challenges faced by the dry bulk industry, which has yet to find a stable footing amidst market turbulence.
Crude Tanker Market Faces Declines Amid OPEC+ Decisions
The crude tanker market didn’t fare much better, with the Drewry Crude Tanker Equity Index falling 6.4% WoW. This decline was driven by drops in Aframax and Suezmax rates, compounded by OPEC+‘s decision to delay oil output increases for the coming months. The stock prices of crude tanker companies followed suit, underperforming the Russell 2000, which also saw a decrease of 5.7% WoW. Despite the weekly dip, the crude tanker index remains up 0.9% YTD, supported by tight tonnage supply in the market.
Product Tankers Slide as MR Tanker Rates Fall
The Drewry Product Tanker Shipping Equity Index also experienced a significant 8.8% WoW decline, driven largely by a drop in Medium Range (MR) tanker rates. Similar to the crude tanker sector, OPEC+’s output decisions negatively impacted product tanker companies’ stock prices, which lagged behind the broader market. Despite the sharp WoW decline, the product tanker index has surged 11.8% YTD, substantially outperforming the Russell 2000, which has only risen 3.2% during the same period.
LNG Shipping Sees Slight Decline But Strong YTD Gains
The Drewry LNG Shipping Equity Index saw a slight decline of 3.3% WoW, in line with the global market sell-off. However, this sector remains one of the strongest performers in 2024, with a 21.4% YTD increase, driven by a surge in the stock prices of companies such as Nakilat and Golar LNG. Nakilat’s recent successes in securing multiple LNG ship newbuild orders from QatarEnergy have bolstered its stock price, while Golar LNG has benefited from rising interest in floating liquefied natural gas (FLNG) projects.
LPG Shipping Continues Downward Spiral
Lastly, the Drewry LPG Shipping Equity Index fell by 6.9% WoW, reflecting the ongoing challenges in this niche market. The Russell 2000 dropped 5.7% WoW, though the LPG sector’s underperformance was more pronounced. YTD, the LPG Shipping Index has declined 6.1%, a stark contrast to the Russell 2000’s 3.2% YTD increase. This sector’s sharp downturn highlights the persistent volatility and underperformance within the LPG shipping market.
Source:drewry