Slide in shipping group shares pared after they deny reports of deal with Houthi attackers

By Jamie Chisholm

Shares of Europe's big shipping groups fell sharply on Monday after a report said carriers had entered an agreement with Yemen's Houthi that would stop the Iran-backed militia attacking vessels in the Red Sea.

The stock of Hapag-Lloyd (XE:HLAG) and A.P. Moeller-Maersk (DK:MAERSK.B) had risen about 50% and 30% respectively in the past month, according to Dow Jones data, after carriers said it was too dangerous to travel through the Red Sea and the Suez canal, sparking a doubling of shipping rates between Asia and Europe over the same period.

The Houthi have been targeting shipping with drones, missiles, helicopters and boats in the region in protest of Israel's invasion of Gaza, which followed the Hamas attack of October 7th.

However, a report by Shippingwatch on Monday said carriers were entering agreements with the Houthi to avoid attacks, a development that may ease tensions, encourage shipping groups to resume Red Sea transit and thus reduce the recent premium in shipping rates.

Shares of Hapag-Lloyd on Monday fell 7% while A.P. Moeller-Maersk stock lost 4.3%.

However, both stocks had been lower, but pared losses after Shippingwatch clarified that "it is not the largest container carriers who have entered agreements with the Houthis to avoid attack", and both Hapag-Lloyd and Maersk denied any pact had been reached, according to Bloomberg.

MarketWatch has reached out to Hapag-Lloyd and Maersk for comment. ShippingWatch said it also reached out to Cosco (CN:601919) and CMA CGM for comment.

As the violence continues the number of ships sailing through the Suez Canal over the past weekend fell to the lowest since the waterway was blocked by the Ever Given container ship in 2021, Bloomberg reported.

Meanwhile markets are watching to see if the longer journeys - with ships having to sail around South Africa's Cape of Good Hope - and higher shipping rates once again trigger supply-disruption inflation like that seen during the COVID pandemic.

-Jamie Chisholm

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01-08-24 1137ET

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