Shipping stocks are rapidly surging! The crisis in the Red Sea has triggered soaring freight rates, and these concept stocks have already doubled in value this year.

Futu News ·  Jun 3 18:10

Since November of last year, the conflict in the Red Sea region has had a profound impact on the global shipping industry. Recently, Singapore's port has suffered from an epic "blocking ship," which has caused global shipping prices to soar again.

In May, the main contract of the shipping index (European Line) continued to rise, with a cumulative increase of more than 41% for the whole month, and many historical highs were repeatedly refreshed.

Source: Wind
Source: Wind

The Red Sea crisis continues to ferment! The situation of "one box is hard to find" has reappeared.

The Red Sea crisis has choked the world trade "throat," causing a "butterfly effect" in the global scope. The rare large congestion in Singapore's port is one of them.

Last week, linerlytic, a shipping consultancy, showed that the accumulated number of containers backed up at the world's second-largest container port, Singapore's port, has reached a staggering 450,000 TEUs, far exceeding the cycle high during the outbreak of the epidemic, and the delay time at the port has been extended to 7 days.

At the same time, the situation of "one box is hard to find" has reappeared, and global container shipping prices have seen a new round of increases since May. On May 31, the Shanghai Container Freight Index (SCFI) composite index reported 3,044.77 points, up 341.34 points from the previous week, or 12.63%. In the 13 sub-routes, only the Japan-Kanto line freight rate fell slightly, and the remaining 12 all rose, with the US West Coast line freight rate rising nearly 20% in a single week.

Many factors, including extreme weather and a rebound in U.S. demand, have contributed to the current situation, but the Red Sea crisis, which has lasted for nearly half a year, is believed to be the root cause of this epic "blocking ship."

Shenwan Hongyuan pointed out that the market previously underestimated the efficiency loss under the Red Sea bypass, and the current price increase is driven by supply and demand, not because the shipping company actively controls capacity. The airlines have increased the rental of external fleets, and the rental of container ships can be verified. Short-term demand exceeds expectations, and the peak season demand has not been overdrafted. Under the influence of the bullwhip effect, there is a possibility of sustained over-expectation demand. In addition, if the Red Sea bypass continues until the Europe-US long-term agreement signing season, there is a possibility that profits will approach or exceed the previous level.

What investment opportunities are there in the Hong Kong and US stock markets?

Futu news May 13th"Shipping price skyrocketed past the gold! What investment opportunities are there in the Hong Kong and US stock markets?"The article sorted out the relevant concept stocks in the Hong Kong and US stock markets.

It is worth noting that some companies have recorded double-digit gains since May 13th. Specifically, in the US stock market, liquefied petroleum gas shipping company$BW LPG LIMITED (BWLP.US)$has accumulated a gain of more than 37%;$ZIM Integrated Shipping (ZIM.US)$has risen more than 28%, and the year-to-date increase has doubled; and the international container shipowner$Costamare (CMRE.US)$Up nearly 20%, the world's largest operator of finished oil tankers.$HAFNIA LIMITED (HAFN.US)$Rising nearly 13%;

On the Hong Kong stock market side,$COSCO SHIP HOLD (01919.HK)$Accumulatively rose more than 21%, the stock price has risen more than 80% since this year;$COSCO SHIP DEV (02866.HK)$Up nearly 12%, accumulated rise more than 30% this year.

However, investors need to be aware that Morgan Stanley had previously warned that once the red sea interference disappears, the container shipping industry may return to cyclical lows.


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