Comments - MMRI Is Rising.
We shall see. Overall, shipping rates are rising again due to the ongoing issues in the ME. Shippers are running longer routes, not picking up empty containers, not spending as much time in port, postponing maintenance, trying to maintain delivery schedules. Rates have doubled on some routes to the U.S. over the past month.
“From the Far East into the U.S. West Coast, it is likely spot rates will surpass the level seen at the height of the Red Sea crisis earlier this year, which demonstrates how dramatic the recent increases have been,” said Emily Stausbøll, senior shipping analyst at Xeneta….“
Most of this issue is affecting bulk carriers at the moment, whereas previously the clean fuel tankers were also affected and hence higher rates translated into higher equity prices. Of the ones I listed, at least half are committed to returning 100% of profit to SH via dividends and buybacks. Hence, all this translated into stellar returns.
But with oil prices range bound and demand somewhat softer than it should be at this time of year, as a group the clean fuel shippers equity prices have stalled out. Of the 8 I own, only one has stopped out…and all my stops are trailing at 7%…and as I said I sold $ASC so now I’m at 7.
Definitely an open question as to where they are headed. It’s a niche market to begin with and retail has very little money invested. So paying attention to momentum and flows is really important because institutions are the drivers.
For more on the complications in the general shipping industry here’s a decent article.
Good luck. We will hope for the best.
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