SHIPPING STOCKS EXTEND THEIR GAINS
Shipping stocks continued their rally last week. The Dow Jones Global Shipping Index gained 4.8% w-o-w. The liner sector jumped by 6.5% and shrugged off the last week's downgradings for Maersk. Hapag Lloyd presented an impressive Q4 result. Zim, the newcomer in the liner sector, was able to climb over USD 20, after their disappointing IPO. However, one should keep in mind that rising fuel prices and charter rates for chartered-in tonnage will have a somewhat dampening effect on the earnings growth for liners in the quarters ahead.
The VLGC market is under continuous stress. Propane exports from the MEG and US are stagnating or even declining due to the severe winter (US) and production cuts (MEG). However, the US propane production figures are still solid. Thus, we expect the US propane inventories to bottom-out in March and accelerate which could re-open the ARB, again.
From a strategic perspective, all our sentiment indices are now in positive territory - except for crude, which is neutral. Brokers report rising asset prices and slightly increasing ordering activity across all sectors. We view this as a positive sign and remain optimistic for the rest of the year.