Shipping stocks rise in Europe after Red Sea attacks (updated)

dAmico International Shipping SA

18/12/2023 09:38

(Adds analyst comment from para 3, details, updates shares)
       MILAN, Dec 18 (Reuters) - Shipping stocks rose across
European exchanges on Monday after Iranian-backed Houthi
militants in Yemen stepped up attacks on vessels in the Red Sea,
prompting Denmark's A.P. Moller-Maersk  MAERSKb.CO  and other
freight firms to avoid the Suez Canal.
    Traders bet a prolonged disruption to the key route, which
allows the East-West trade without the time and expense of
circumnavigating Africa, could boost rates.
    Maersk rose 3.5% in early trade in Copenhagen, before paring
some of those gains. 
    By 0930 GMT, D'Amico International Shipping  B7C.MI , Hapag
Lloyd  HLAG.DE  and Hafnia  HAFNI.OL  gained between 3 and 4%.
Frankfurt-listed shares in Scorpio Tankers  S0QA.F  and Nordic
American Tankers  NAT.N  rose 5.6 and 8.9%, respectively.
    "We believe that the decision to avoid the Red Sea route for
crude/product cargoes will increase transport time and may put
further upward pressure on freight rates if this condition
persist," Massimo Bonisoli, an analyst at Equita, said.
    Jefferies said should ships avoid the Red Sea and sail
around the Cape of Good Hope, the utilisation impact would be
significant, with containers and tankers the most affected.
    "The Suez Canal is a vital link in seaborne trade and the
global merchant fleet is being stretched as ships change trade
patterns. All segments are active in the region and likely will
see stronger rates in the near-term," Jefferies analysts said.
    A tanker from the Middle East would take 17 days to get to
Europe via Suez and 41 days by going around Africa, it noted,
adding that military-supported convoys could be a better
alternative than going around the Cape of Good Hope.
     Maersk on Friday paused all its container shipments through
the Red Sea until further notice, and was joined on Saturday by
the Swiss-based MSC and French shipping group CMA CGM.

 (Reporting by Danilo Masoni; Editing by Amanda Cooper)
 ((Danilo.Masoni@TR.com; Reuters Messaging:
danilo.masoni.thomsonreuters.com@reuters.net))