Shipping stocks are rising in early trading as concerns grow that the fallout from a U.S.-Iran military clash could spread to the Red Sea.
At 9:33 a.m. on the 21st, STX Green Logis(465770) was trading at 4,930 won, up 790 won (19.08%) from the previous session on the Korea Exchange. It climbed as high as 5,270 won intraday. Heung-A Shipping(003280) was also up 189 won (10.38%) at 2,010 won.
As the Yemen-based, pro-Iran Houthi rebels declared a maritime blockade against Saudi Arabia, expectations that sea freight rates will rise appear to have lifted the shares. The Bab el-Mandeb Strait, which the Houthi rebels cited as a blockade target, is a key shipping lane linking the Red Sea and the Arabian Sea.
Earlier, as concerns mounted about disrupted passage through the Strait of Hormuz, Saudi Arabia increased shipments by transporting crude via overland pipelines to the western port of Yanbu and exporting through the Red Sea. But if even the Bab el-Mandeb Strait is blockaded, such detour export routes would be cut off, heightening worries that global crude supplies could be disrupted.
In the market, there is an outlook that if uncertainty grows over major Middle Eastern sea routes, a confluence of delayed vessel operations, higher marine insurance premiums, and a shortage of shipping capacity could push freight rates higher.
Recently, Iran's Islamic Revolutionary Guard Corps claimed it attacked two oil tankers passing south of the Strait of Hormuz, and the United States has continued airstrikes on military facilities in southern Iran. As tensions in the Middle East rise, investor sentiment toward the shipping sector is improving.