Text/ATFX
At the beginning of the week, Hong Kong shipping stocks were on the rise. After reports that a phased cease-fire was expected in Gaza, Asian shipping stocks fell across the board on Monday. If the situation in the Middle East eases, it is expected that freight rates will gradually return to pre-conflict levels, putting downward pressure on shipping stocks.
Hamas initially approved a proposed phased cease-fire agreement in Gaza. The Baltic Sea Dry Bulk Cargo Index fell 2.72% to 1966 points last Friday (5th), falling for 3 consecutive trading days, hitting a low of more than a week. Mainland forward freight index (European line) futures plummeted on Monday, with European shipping 2410 plummeting 11%; European shipping 2412 plummeting 11.4%.
Shipping giant Maersk recently anticipated that the interruption of container traffic through the Red Sea will continue until the third quarter of this year, so the next few months will be full of challenges for carriers and companies. The Maersk statement said that the longer the Red Sea problem continues, the more difficult it is to eliminate additional costs, and it also affects the ability to meet demand.
In response, Dongfang Overseas International (00316) had already taken the lead in falling by nearly 10% in the early stages; COSCO Maritime Control (01919) once plummeted by more than 10%. Haifeng International (01308) fell more than 4% in the intraday period; Pacific Shipping (02343) plummeted 5.2%; and COSCO HNA (01138) fell 4.2%.
The August contract is nearing delivery, closely following the delivery of the spot price. The 2025 corresponding contract is uncertain due to the long distance. Goldman Sachs pointed out that European long-distance shipping rates fell on a weekly basis for the first time since mid-April, or increased investors' concerns that freight rates would peak.
However, some agencies believe that shipping freight rates are still on the rise. The current environment of strong demand and tight supply remains unchanged. The UN Security Council's Israeli-Kazakh cease-fire agreement has not rebuilt the confidence of shipping companies. The latter will continue to raise freight rates, and spot container freight prices can continue to rise until the end of the third quarter. Furthermore, based on the fact that parts of the Houthis are still attacking in the Red Sea, and the price of shipping futures has risen further in recent weeks, the market expects that high freight rates may continue until the first half of 2025.
COSCO Haineng (01138) issued a profit warning after closing last Friday. It is expected that the net profit attributable to the company's owners recorded in the first half of this year will be about 2.55 billion yuan, down about 11.9% from the same period last year. According to the Group, the decline in net profit of the company's owners in the first half of the year was mainly due to a year-on-year increase in operating performance in the first half of this year and disposal revenue of 0.398 billion yuan from the sale of five ships in the first half of last year. There were no sales of ships in the first half of this year.
Yesterday, the market partially digested COSCO Marine Energy's net profit or negative year-on-year decline in the first half of the year. Therefore, the short-term stock price is more focused on news about the shipping sector as a whole. It is necessary to note that the relatively low season in the third quarter may continue to be bad for stock prices, but its steady profit growth trend as a tanker giant can ease downward pressure. Technically, based on the daily moving average aggregation at HK$10, the stock price currently needs to stay at the bottom of the range for nearly three weeks, otherwise it will continue to open up room for testing HK$9.
