Industrial: Supply and demand factors are favorable, optimistic about the future upward space of dry bulk shipping.

Industrial released a research report stating that the demand side of bulk dry cargo shipping has multiple favorable factors, while the supply side has limited incremental capacity, and is expected to enter a new upswing cycle. From the demand side, the demand for coal, grain, and other goods remains supported, and the ongoing growth in the shipment of ore from Guinea's West Mangan and the export of bauxite, as well as the future post-war reconstruction in Russia, Ukraine, and Israel all bring favorable options; on the supply side, under the pressure of high ship prices and long lead times, the supply is unlikely to shift towards being more relaxed in the coming years. The bank expects that the dry bulk cargo shipping market will enter a moderate recovery cycle in the coming years, with the gradual growth in volume, demand for distances, and the central price of transportation expected to gradually rise. Industrial's main points are as follows: Bulk dry cargo shipping: Diverse goods, significant cycles Bulk dry cargo shipping is one of the three main businesses in the global shipping market, with the transportation of goods mainly consisting of iron ore, coal, and grain (accounting for about 60%), as well as including small bulk goods such as steel, timber, fertilizers, and bauxite. From the demand side, the demand for bulk dry cargo shipping is the product of volume and distance, with analysis mainly focusing on China's demand (the world's largest buyer of bulk goods) and the seasonal rhythms of iron ore, coal, and grain shipments, as well as changes in the geographical structure of supply and demand and changes in distance due to geopolitical factors; from the supply side, bulk dry cargo fleets are composed of larger to smaller ships, with Cape-sized, Panamax-sized, Panamax Causeway, and Handy-size ships, among which Handy and Panamax Causeway smaller ship types account for the majority in number, while Cape-sized ships dominate in carrying capacity. The bulk dry cargo shipping market is a completely competitive market, with a global bulk dry cargo fleet capacity CR8 index of only 10.34%, significant price volatility, with an upward trend often led by demand, while supply changes lag behind price changes. Overall demand analysis: Multiple favorable options exist Historically, rate cuts by the Federal Reserve have often led to a certain degree of economic recovery globally, boosting demand for dry bulk goods, and with the Federal Reserve currently starting a new rate-cutting cycle, demand for dry bulk seaborne transport is expected to rise again. Specifically, in terms of goods, the performance of major goods is stable, with iron ore, bauxite, and other goods having favorable options: Iron ore market: China's iron ore imports remain steady, with the Manganese Mine in West Manganese expected to reshape the global supply and demand landscape with production commencing. From the demand side, China is the absolute major player in global iron ore imports, with China's iron ore imports reaching 1.238 billion tons in 2024, accounting for 77.5% of the global total; from the supply side, Australia is the world's largest supplier of iron ore, exporting 65.656.65 million tons of iron ore to China in October 2025, accounting for 59.0% of China's imports; Brazil is the second largest supplier of iron ore, with iron ore exports to China reaching 25.803 million tons in the same month, accounting for 23.2% of China's imports. Looking ahead, the Guinea West Manganese Mine, led by Chinese capital, has commenced production and shipment, with its production capacity set to gradually climb to 120 million tons/year from 2026 to 2032, representing about 9.69% of China's iron ore imports; given that the China-Guinea route is 2.44 times longer than the Australia-China route, a shift of some iron ore supply from China to Guinea may lead to continued growth in demand for distances. Coal market: Significant pressure on the demand side, structural adjustments on the supply side From the demand side, China is also the world's largest coal importer, with China's seaborne coal imports reaching 421 million tons in 2024, accounting for 30.6% of the global total; from the supply side, Indonesia and Australia are the world's largest coal exporters by sea, with Indonesia's seaborne coal exports growing at a CAGR of 9.93% from 2000 to 2024. The growth rate exceeds that of Australia, indicating a significant trend of structural adjustment. Currently, with the "anti-inside-curling" of coal in China, the price difference between imported coal and domestic coal has widened again, and the imported coal market is expected to be activated; however, with the gradual promotion of new energy replacement, and the gradual decline in the proportion of coal-fired power generation in China, the upward space for coal trade is limited. Grain market: Spatial and temporal dispersion of supply and demand, and adjustment in route structure From 2000 to 2024, global grain seaborne volume reached a CAGR of 4.84%, with soybeans showing a high CAGR of 5.67%, much higher than coarse grains (3.25%) and wheat (2.68%), reflecting the improvement in living conditions in the southern hemisphere globally, transitioning from "being full" to "eating well," with continuous growth in protein and oil consumption. Looking ahead, structural adjustments are worth noting: Chinese grain imports are peaking and stabilizing, while the demand for grains from other developing countries continues to grow rapidly, potentially leading to further geographical diversification of grain demand. Small bulk market: Broadly related industries, good growth certainty Small bulk goods cover a wide range of industries in the real economy such as agriculture, construction, manufacturing, etc., with demand growing in parallel with global economic development.Nonetheless, in the case of bauxite, demand for Chinese imports of bauxite has grown rapidly with a CAGR of 29.65% from 2004 to 2024; on the supply side, Guinea is becoming a major supplier of bauxite globally, with rapidly growing shipments, with a CAGR of 21.82% from 2016 to 2024, with a significant increase in bauxite transportation on the China-Guinea route continuing to lengthen demand for distances in small bulk goods. Overall supply analysis: High ship prices restrict capacity growth, with no expectation of a loose future Since the beginning of this century (from January 2000 to mid-December 2025), the capacity of the bulk dry cargo fleet has grown from 267 million deadweight tons to 1.064 billion deadweight tons, with a CAGR of 5.47%, among which Cape-sized ships and Handy-size ships have become the largest increment and the highest growth rate, respectively. Currently, the bulk dry cargo fleet has re-entered an aging period, with the average age of the fleet reaching 12.84 years by mid-December 2025, with ships over 20 years old accounting for 10.83%, with smaller ships showing more significant aging. Currently, countries are increasingly strict on regulating ship carbon emissions, limiting the speed and economic feasibility of old and outdated capacity; at present, with high ship prices and long lead times, the reality of constraints on future capacity supply of bulk dry cargo ships remains: by mid-December 2025, the proportion of bulk dry cargo ships on order is 11.04%, much lower than the average value of the past twenty years, making it challenging to meet the demands for fleet renewal, with a more pronounced constraint on supply for smaller ships (as of the end of November 2025, the proportion of Handy-size ships on order was only 8.94%). Valuation: PE demonstrates upward elasticity, PB reflects long-term value As a strong cycle, with high volatility and heavy assets, the upward cycle of the bulk dry goods market tests the elasticity of companies, while the downward cycle tests their ability to navigate the cycle, the former being reflected through the price-to-earnings ratio (PE); and the latter through the price-to-book ratio (PB) and the market value-to-capacity ratio (P/DWT). Through the analysis of major dry bulk shipping companies in the A-share, Hong Kong stock, and U.S. stock markets, it can be seen that currently, in terms of the price-to-earnings ratio, U.S. dry bulk shipping companies have a higher PE than those in A-shares, Hong Kong stocks, and Taiwan stocks, but in terms of the price-to-b