A.P. Moller Maersk share price has bounced back as investors watch the ongoing crisis in the Red Sea. After bottoming at DKK 9,814 in November, the stock has bounced back by more than 31% to DKK 12,915. It remains about 10% below the highest point in 2023.
Shipping rates are risingMaersk and other shipping stocks have bounced back in the past few weeks. In Germany, Hapag-Lloyd shares have risen by more than 35% from its lowest level in 2023. Similarly, in Taiwan, Evergreen Marine shares have risen to its highest level since June 2022.
In the United States, ZIM Integrated stock price is up by over 56% from the lowest point in 2023. This trend is happening as traders price in a new normal in the shipping industry as attacks at the Red Sea rise.
The most recent data shows that the Drewry World Container Index has risen to $1,661, its highest level since September last year. It bottomed at $1,340 in 2023. Shipping rates have risen to most destinations, including to New York, Rotterdam, and Los Angeles.
Shipping rates have risen for three main reasons. First, attacks at the Red Sea have pushed Maersk and other companies to pause the Red Sea route. As a result, they have started using the longer route that goes through the Cape of Good Hope in South Africa.
Second, there are concerns about the Panama Canal, where the waiting time of ships has also grown recently because of low water levels. The average waiting time at the canal stands at over 20 days, forcing companies to use longer routes.
Finally, there are signs that the shipping industry has bottomed as demand from key countries rise. Recent Chinese data reveals that the country’s retail sales and industrial production rose in November. Iron ore prices have also jumped recently.
In its most recent results, the company said that it was intensifying its cost cut program. It reduced its workforce from 110k to 103k and the management is working to move it below 100k. It expects to save $600 million in 2024.
For starters, Maersk is the second-biggest shipping company in the world after MSC. It operates three key businesses, including Ocean, Logistics & Services, and Terminals. It is the fourth-biggest Danish company after Novo Nordisk, DSV, and Vestas Wind Systems.
Watch here: https://www.youtube.com/embed/QIbuuhZbRFo?feature=oembedMaersk share price forecast
The daily chart shows that the Maersk share price has bounced back in the past few months. It has moved above the ascending trendline, which connects the lowest levels since October 2022.
The stock has jumped above the 50-day and 100-day Exponential Moving Averages (EMA). Similarly, the Relative Strength Index (RSI) has moved close to the overbought level. The MACD has moved above the neutral point.
Therefore, the outlook for the shares is bullish, with the next point to watch being at DKK 14,265, its highest point on July 20th.
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