The foreign trade market has ushered in a substantial recovery, and the traditional peak season of the container shipping industry has arrived ahead of schedule. Supported by multiple positive resonances, shipping leader COSCO Shipping Holdings has risen sharply during the session, with a single-day increase of more than 6%, directly driving the collective strength of the entire port shipping sector.
From the perspective of the secondary market, COSCO Shipping Holdings, which is listed on both Hong Kong stocks and A-shares, has experienced a strong market at the same time. A number of shipping stocks such as Orient Overseas and Pacific Shipping in the sector have followed suit. Ports and freight forwarding subdivisions have also ushered in the deployment of funds in batches.
1. Three major positive factors have helped the peak season of container shipping to heat up ahead of schedule
1. European and American stocking + tariff rush shipment, export volume has exploded
The third quarter of each year is the traditional peak season for European and American Christmas purchasing. In previous years, stocking was mostly concentrated in July and August. This year, overseas supermarkets locked the supply of goods in advance and started stocking plans, and a large number of foreign trade orders poured into major domestic ports.
In addition, overseas tariff policies are about to be implemented. In order to avoid rising costs, many foreign trade merchants choose to expedite shipments in advance. Shipping prices on the West-US and East-US routes have jumped sharply in a short period of time. The freight rates on some popular routes have increased by more than 30% month-on-month.
The main foreign trade ports in East and South China have recently been in short supply of cargo space, with cabin explosions and temporary dumping occurring frequently. Solid shipments have supported shipping demand.
New energy equipment and mechanical and electrical products continue to become the main force in domestic exports, further lifting the overall pallet.
2. The world’s leading shipping companies have uniformly raised prices and have a clear stance on price support.
Maersk, MSC and other leading international shipping giants have successively issued price increase notices. Freight rates for many ocean routes have been increased. At the same time, peak season surcharges have been imposed. European line container quotations have increased significantly compared with last month.
The domestic shipping freight index is rising simultaneously, route futures prices are rising steadily, and rising freight rates directly increase the revenue and profits of shipping companies, becoming the core reason why capital is optimistic about the shipping sector.
3. Multiple factors have compressed effective transport capacity, and the supply and demand pattern continues to optimize.
The detour problem of the Red Sea route has not been completely solved. Ships have detoured around the Cape of Good Hope, significantly lengthening the navigation distance, and the original available transport capacity has been passively shrunk; the Panama Canal traffic restrictions and intermittent strikes at many overseas ports have continued to tighten the global supply of container space.
As international oil prices rise, many ships choose to sail at low speeds, and ship turnover efficiency decreases, further exacerbating the shortage of space.
At the same time, the number of new container ships launched globally this year is limited, and the pace of new shipping capacity has slowed down. It is difficult to have excess shipping capacity in the short term, and the fundamentals of supply and demand continue to improve.
2. Institutional market outlook: Shipping profits are expected to continue to improve in the second half of the year
Many brokerage institutions have intensively updated industry research reports and generally reached a consensus: the turning point of container shipping prices in the second quarter has been confirmed. As the peak season continues to deepen, shipping prices in the second half of the year have the basis for a steady upward trend.
As the leader in domestic container shipping, COSCO Shipping Holdings’ valuation and dividend rate are at low levels in the A-share market. As freight prices recover, the company is expected to continue to deliver on its performance in the second half of the year, further opening up its profit margins.
Institutions have raised their full-year performance expectations, which is also the key logic behind the recent influx of funds into the market.
3. Rational reminder: The market is not rising unilaterally, pay attention to potential risks
Although expectations for the current peak season are full, there are still uncertain factors: if the recovery of overseas terminal consumption is less than expected, the pace of foreign trade shipments slows down; or if subsequent large-scale deliveries of new ships are concentrated, geopolitical conflicts are eased, and detoured ships return to their original routes, it is possible to suppress shipping prices and suppress the upside space of the shipping sector.
Investment is risky, so you need to be cautious when entering the market. This article is only for sharing industry information and does not constitute any investment advice.
