Shipping stocks trade mixed as companies avoid Red Sea and Suez Canal

Shipping stocks traded mixed in the opening trade on Monday (December 18) as global shipping majors are avoiding the Red Sea and Suez Canal in the wake of the decision that was taken in the aftermath of the attack on commercial ships in Yemen.

Stocks from the pack, including the likes of Shipping Corporation of India, traded down around 0.6 per cent; GE Shipping was trading weak by 0.5 per cent and Shreyas Shipping was down by a marginal 0.04 per cent. On the other hand, Seamec traded higher with gains of around 5 per cent, while Cochin Shipyard was also up around 2 per cent.

As per Zee Business Research, the shipping industry may see a 30 per cent rise in freight and insurance costs due to the current crisis. Egypt's Suez Canal authority said on Sunday it was closely monitoring the impact of tensions in the Red Sea after recent attacks by Yemen's Houthis on vessels in the southern part of the basin, a Reuters report said.

The research desk notes that 30 per cent of the world's containers pass through the Suez Canal. Currently, ships are ordered to stop at the nearest safe harbour, and it has not been decided whether ships need to be re-routed or not.

Analysts said it may take two to three more weeks for the alternate route between Europe and Asia, depending on where the consignment has to reach, and amid this backdrop, as ships will remain in transit for longer than usual, freight prices will firm up.