Mitsui O.S.K. Lines, a major shipping company, has seen its share price hit new highs for consecutive days, amid growing views that the disruption to global logistics caused by El Niño and the situation in the Middle East, along with water shortages at the Panama Canal, is behind the rise.
Share prices of major shipping companies, including Mitsui O.S.K. Lines, have been hitting new highs for consecutive days, drawing market attention. Expectations are growing that the share price gains will continue, supported by strong earnings.
The backdrop is heightened tensions in the Middle East and global logistics disruptions caused by El Niño. As securing the safety of the Suez Canal has become more difficult, the use of diversionary routes has increased, extending one-way transit times between Asia and Europe by approximately 1 to 2 weeks.
The longer routes have increased fuel costs, while insurance premiums for avoiding high-risk waters have also surged. These higher costs are being passed on to freight rates, keeping spot rates for container shipping at elevated levels.
Meanwhile, the Panama Canal is experiencing water shortages as El Niño reduces precipitation. Transit restrictions, including draft limitations and a reduction in the number of vessels permitted to pass through each day, remain in place, causing delays in cargo arrivals and making it difficult to allocate vessels.