Source: Finance Association
① The two major players in the Hong Kong stock shipping sector fell in unison. How bad is the boom in the industry?
② Looking ahead to future market conditions, can the shipping cycle recover?
The Hong Kong stock shipping sector reversed the market today and led the decline. As of press release,$COSCO SHIP PORT (01199.HK)$Decreased by nearly 7%,$OOIL (00316.HK)$It fell nearly 6%,$COSCO SHIP HOLD (01919.HK)$It fell nearly 4%,$SITC (01308.HK)$,$COSCO SHIP ENGY (01138.HK)$Both followed suit and fell.
According to the news, Oriental Overseas International announced the day before that revenue for the third quarter plummeted 65% year on year to 1.76 billion US dollars. The announcement also showed that in the third quarter, Oriental Overseas's overall transportation rate fell 5.1% year on year, and the overall average revenue per TEU decreased by 67.3% year on year.
Meanwhile, the earnings warning announcement issued by COSCO Marine Control, a leader in the Hong Kong stock shipping sector, further adversely affected sector sentiment. According to COSCO Marine Control's announcement, the company's net profit for the first three quarters is expected to drop 77.35% year-on-year to 22.059 billion yuan.
Notably, COSCO Marine Control also said that since 2023, the company's container shipping industry has faced many challenges such as weakening transportation demand and rising capacity supply, and the market freight rate level has dropped significantly compared to last year.
Data show that in the first three quarters of 2023, the average value of China's export container freight rate composite index (CCFI) fell 69.54% year on year.
Furthermore, Huatai Futures researchers Gao Cong and Cai Shaoli pointed out in their October 8 report that from a medium- to long-term perspective, the overall shipping market has been in a fundamental pattern of increased supply and hidden demand in the past two years.
On the supply side, the year-on-year growth rate of container shipping capacity in 2023 was about 7.7%, and the year-on-year growth rate of container shipping capacity in 2024 was about 6.7%. However, at the demand level, the current consumption situation has not improved significantly.
Huatai Futures also specifically mentioned that the US perspective still needs to be wary of risk events in the second half of the year and the impact on consumption disturbances. On the other hand, the Eurozone has yet to see improvements in fundamentals driven or repaired.
The CITIC Futures research team also stated in the weekly report on October 8 that a large number of ships were suspended during the National Day, but freight rates are still declining. Some major shipping companies may raise prices later, but the landing situation still needs attention.
Editor/jayden