Shipping stocks sank into the red in trade on Tuesday, June 17, after investors rushed to take some profits off the table, following the sharp rally over the past month.
At 11 am, shares of Shipping Corporation of India Ltd (SCI) sank 5.7 percent to quote Rs 221.81 on the NSE. However, over the past month, shares of the state-owned shipping firm have rallied nearly 20 percent in trade.
Following SCI's fall, a rub-off effect was seen across other shipping players. GE Shipping shares sank 2.2 percent to Rs 982.7 and Essar Shipping fell 0.9 percent to Rs 30.51.
Since the tensions between Israel and Iran surged, shipping stocks surged with full steam. Investors piled into these counters, betting on rising rates of container shipping amid higher crude prices and lower availability.
As conflict in the Middle East spiked, investors assumed that Iran might close Strait of Hormuz, a narrow corridor via which ~20 percent of global oil and LNG shipments take place. This would lead to crude prices soaring past the $80/bbl level, while requiring ships to take longer routes to avoid the Strait. However, experts have suggested that any such closure is unlikely, thus making the fears unfounded.
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On the domestic front, container shipping rates have seen a steep rise in June 2025 so far, up 70 percent MoM from May, on the back of temporary pause in tariffs by the US, noted Emkay Global. However, these levels are still 40 percent below highs seen in July 2024.
"Shipping rates are expected to stabilize except on the transpacific route, where forward bookings from China face uncertainty. However, industry reports suggest that continued port congestions due to potential tariff changes and geopolitical unrest disrupting trade routes pose near-term risk for container spot rates," the brokerage added.
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