Shipping stocks rise in Europe after Red Sea attacks
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 and other freight firms to avoid the Suez Canal.
cumhuriyet.com.trTraders 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, Hapag Lloyd and Hafnia gained between 3 and 4%. Frankfurt-listed shares in Scorpio Tankers and Nordic American Tankers 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.