LAST week was yet another ugly one for bulk commodity shipping stocks. Second-half share performance, already abysmal, worsened further.

Shipping rates – and share prices – are being pressured by lacklustre global demand. The post-Covid demand rebound has dissipated, and tonne-mile upside from the Red Sea crisis and the Ukraine-Russia war has long since maxed out. The election of Donald Trump to the US presidency has further weighed sentiment.

For the latest on equity performance, Lloyd’s List analysed the change in the adjusted closing prices of 35 shipping stocks in various segments, then compared them to the performance of a bellwether of the broader stock market, the SPDR exchange-traded fund that tracks the S&P 500.

The data highlights how 2024 is a tale of two halves, with shipping shares generally outperforming SPDR during the first half, then performing worse than SPDR in the second.

Through Monday’s close, the 35 shipping stocks were flat since January 2 on average (not weighted by market cap). In contrast, SDPR was up 29%. Over the course of the first half, shipping stocks rose by an average of 29%, outpacing SPDR’s 16% gain. So far in the second half, shipping stocks are down an average of 21%, while SPDR has risen 11%.

There are some big differences between shipping segments, with container shipping doing the best by far and tanker and gas carrier stocks faring the worst.

Tanker shares hit hard

Product tanker stocks have had a rough second half, as spot rates have fallen year on year. The four pure-play product tanker stocks surveyed — Hafnia, Scorpio Tankers, Ardmore and Torm — are down by an average of 19% year to date (YTD). The mid-year swing in these stocks has been particularly extreme: They were up 38% over the course of 1H24 (June 30 versus January 2), and are down 40% since the start of the second half.

Hafnia is faring the best, down 11% YTD, with Torm doing the worst, down 27%.

The six crude tanker owners surveyed — DHT, International Seaways, Frontline, Teekay Tankers, TEN and Nordic American Tankers (NAT) — are down 16% YTD.

Very large crude carrier owner DHT is the best performer of the group, flat YTD. The worst performer, suezmax owner NAT, which has a debt facility maturing in February, is down 32% YTD.

LPG and LNG carrier shares fall

LPG carrier stocks generally followed the same pattern as crude and product tanker stocks: up in the first half, down in the second.

Navigator Gas, which operates handysize LPG carriers, is the best performer, up 2% YTD. Dorian LPG, which operates very large gas carriers, is the worst, down 38% YTD.

Dorian’s shares have faced pressure not just from market factors, but also from its decision to sell $89m in common equity in early June. It was a great deal for Dorian — it used its stock to generate cash when its share pricing was peaking — but not for investors. Monday’s closing price was 45% below the price investors paid in the follow-on offering.

Shares of LNG carrier owners have fallen in both the first half and the second, with much steeper declines in the second. The adjusted closing prices of Flex LNG  and Cool Co are down 15% and 33% YTD, respectively. Although listed LNG carrier companies are largely shielded from the spot market, the collapse of LNG shipping spot rates to historic lows, and the concurrent decline in period rates, has curbed investor sentiment.

The six LNG and LPG shipping stocks surveyed — Navigator, BW LPG, Flex LNG, Avance Gas, Cool Co and Dorian — are down an average of 20% YTD, with an 8% average first-half gain offset by a 26% second-half decline.

Dry bulk stocks not as bad as tanker stocks

Shares of bulker owners are a tale of two halves as well, but they logged higher first-half gains than tanker and gas carrier stocks, so their YTD performance is better than for liquid bulk.

The seven dry bulk stocks surveyed — Golden Ocean, Seanergy, Genco, Safe Bulkers, Himalaya, Star Bulk and Diana Shipping — are down by an average of 4% YTD. After rising by an average of 34% from January to June, they have fallen 28% between July and Monday.

There is a wide disparity among dry bulk stocks. The adjusted closing prices of capesize owners Golden Ocean and Seanergy are still up 10% YTD, while Star Bulk is down 12% and Diana is down 30%.

The big winner on 2024: container shipping stocks

A rule of thumb in shipping is that a massive wave of newbuilding deliveries is bad for stocks. Container shipping has proven that wrong in 2024. Freight rates and containership leasing rates have held up despite the newbuilding deluge, courtesy of strong demand and longer voyage distances.

The six container stocks surveyed — Zim, MPC, Matson, Global Ship Lease, Hapag-Lloyd and Maersk — are up 35% YTD. Over the course of the first half, these stocks rose an average of 30%; since July they have risen another 10%.

Container shipping is the only shipping segment that has outperformed SPDR this year.

Container line Zim is the star performer in the group. Even after a recent pullback due to announced insider sales, the adjusted close of Zim was up 88% on Monday YTD. The adjusted close of Zim doubled over the first half and is down only 6% in the second half.

The worst performer among those surveyed is Maersk, the world’s second-largest ocean carrier, which is flat YTD.

Multi-segment stocks are a mixed bag

Several listed companies operate in multiple shipping segments. On average, these stocks are still up in 2024.

The six multi-segment stocks surveyed — Navios Partners, Capital Clean Energy Carriers, Costamare, Danaos, SFL and CMB.Tech — are up an average of 20% YTD. 

However, this is largely due to outlier Navios Partners, which is up 70% YTD due to higher retail investor interest in the first half. Navios’ stock has gone from an extreme discount to net asset value to a less extreme (but still sizeable) discount. Excluding Navios Partners, the remaining five multi-segment stocks surveyed are up only 10% YTD.

Multi-segment stock performance is driven by the largest segments in which companies operate. Costamare and Danaos have high exposure to containership leasing, and are up 27% and 11% YTD, respectively.

CMB.Tech (formerly Euronav) is highly exposed to crude tankers, and is the worst performer of the multi-segment companies surveyed, down 15% YTD, in line with tanker stocks.

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