Container Shipping Stocks Rally as Diversion Volumes Spike and Fuel Costs Drive Up Freight Rates

Stock News03-16 14:10

Certain container shipping stocks advanced during the session. At the time of writing, OOIL (00316) rose 4.63% to HK$149.3, COSCO SHIP HOLD (01919) gained 3.97% to HK$15.96, and LC LOGISTICS (02490) increased 1.04% to HK$5.84.

Data from supply chain visibility firm project44 shows that since late February, when escalating hostilities between the U.S., Israel, and Iran led to the effective closure of the strait, container freight diversions have surged by more than 360%. Industry sources noted that due to the conflict, some cargo originally routed through the Red Sea to Egypt is being redirected via Mediterranean routes to reach Egypt. Last week, spot rates on Mediterranean routes rose by approximately $300 per FEU, reaching around $3,300.

Additionally, on March 13, the SCFI Europe route index stood at $1,618 per TEU, up 11.4% from the previous period. Analysis from Shenwan Hongyuan indicated that escalating tensions in the Persian Gulf have triggered a sharp increase in global bunker fuel prices, prompting some carriers to impose fuel surcharges. With global bunker fuel supplies tightening, potential refueling difficulties and disruptions could lead to port congestion and scheduling chaos, further driving up freight rates.

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