For the week ending 27 September 2024, the Drewry Port Equity Index (DPEI) surged by 4.1%, with both global and regional terminal operators contributing to this remarkable growth. Global Terminal Operators (GTOs) posted a steady increase of 2.2%, while Regional Terminal Operators (RTOs) outpaced them significantly, with a whopping 9% rise. In comparison, the S&P 500 index delivered a modest gain of just 0.6% over the same period.
The year-to-date (YTD) numbers highlight the momentum of the maritime industry in 2024. The DPEI is up by 16.7%, with GTOs leading the charge at an impressive 18.5% YTD. RTOs, although slightly trailing, still recorded a notable YTD growth of 12.9%. Meanwhile, the broader S&P index continues its climb, marking a 20.3% YTD increase.
Drewry’s Port Equity Index includes ten major global operators such as COSCO SHIPPING Ports, CM Port, HPHT, and AD Ports, to name a few. The market capitalization-based index, priced as of 27 September 2024, shows the resilience and steady growth of the port operator sector as global trade flows stabilize following the recent supply chain disruptions.
Container Shipping Index Skyrockets Despite Spot Rate Decline
In a surprising twist, the Drewry Container Shipping Equity Index posted an impressive 10.5% week-on-week (WoW) growth, despite a 7% fall in spot rates during the same period. Investor sentiment around container shipping remained optimistic, likely due to supply chain disruptions caused by a labor strike on the U.S. East Coast.
This surge in container shipping equities suggests that market participants are betting on improved earnings for carriers. The ongoing disruption is expected to allow shipping lines to secure higher freight rates, which has contributed to positive sentiment in equity markets. Year-to-date, the Drewry Container Shipping Equity Index has climbed by 22.3%, outperforming broader markets.
The Drewry Container Shipping Equity Index includes industry giants such as AP Moller Maersk, Hapag-Lloyd, and Evergreen Marine Corp. With global supply chains recovering, these companies are well-positioned to benefit from the gradual stabilization in freight demand and shipping rates.
Dry Bulk Sector Sees a Boost from China Stimulus
The Drewry Dry Bulk Shipping Equity Index rose by 8.2% WoW, driven by stimulus measures in China that are expected to significantly boost demand for the dry bulk shipping sector. Dry bulk equities outpaced the S&P 500, which saw a more modest 0.6% gain in the same week. However, when comparing YTD performance, dry bulk equities increased by 13.4%, lagging behind the S&P 500’s 20.3% rise.
Dry bulk shipping companies like DS Norden, Diana Shipping, and Golden Ocean stand to benefit from these developments. China’s role as a key driver of global demand for raw materials, including iron ore and coal, positions dry bulk operators for sustained growth if these stimulus measures take hold.
Tanker Shipping: Crude and Product Tankers Reflect Mixed Performance
The Drewry Crude Tanker Shipping Equity Index gained 2.9% WoW, as Saudi Arabia announced plans to ease its production cuts starting December 1, 2024. Despite global concerns about oil prices, the tight supply of crude tanker tonnage supported equity gains, resulting in a 6.2% YTD increase. Crude tanker companies such as Euronav and Frontline are among those poised to benefit from the expected easing of oil production cuts.
In contrast, the Drewry Product Tanker Shipping Equity Index showed a slight decline of 0.3% for the week, primarily due to a drop in MR and Handy rates. Despite the minor dip, the product tanker sector still showed a 13% YTD growth, outpacing the Russell 2000, which rose by 9.7% during the same period.
LNG Shipping Surges with Key Project Announcements
The Drewry LNG Shipping Equity Index saw a notable 3.2% increase WoW, driven largely by a 9.9% rise in Golar LNG’s share price. The announcement of Golar LNG’s third Floating Liquefied Natural Gas (FLNG) project on 18 September 2024 has pushed its stock price up by 15% since the decision. Additionally, Nakilat, another key player, has benefited from winning multiple LNG ship newbuild orders from QatarEnergy, contributing to the overall 28.3% YTD increase in the LNG shipping sector.
Investors remain bullish on LNG shipping as demand for clean energy continues to grow globally, and companies like Golar LNG and Nakilat are well-positioned to capitalize on this demand.
LPG Shipping Faces Year-to-Date Decline
While other sectors saw notable gains, the Drewry LPG Shipping Equity Index faced challenges, increasing just 0.8% WoW and showing a sharp decline of 9.1% YTD. Despite some recovery in recent weeks, LPG shipping equities have underperformed the broader market, as the Russell 2000 increased by 9.7% YTD. Companies such as BW LPG and Navigator Holdings face a tough market, but long-term prospects could improve with rising demand for LPG in Asia.
Source: Drewry
