HK Stock Market Move | COSCO Shipping Energy Transportation (01138) rebounds more than 7% amid expectations of improvement in the Middle East situation. The market is focusing on strategic inventory replenishment and increased demand for shipping.

COSCO Shipping Energy Transportation (01138) rebounded more than 7%, as of the time of publication, up 7.12% to HK $14, with a turnover of HK $250 million. On the news front, Trump suddenly announced the cancellation of military action and hinted at a peace agreement being within reach. The US Central Command also stated that the Strait of Hormuz is still open. It is reported that there are more ships than cargo in the Middle East recently, and VLCC-TCE spot freight rates have been continuously falling since May. Changjiang pointed out that the conflict has been going on for three months, and current freight rates may already reflect the scarcity of Middle East cargoes caused by the blockade of the strait and other unfavorable factors. China Securities Co., Ltd. pointed out that the back-and-forth negotiation process between the US and Iran, combined with the cooling of the situation in the Middle East, has led to the disappearance of the risk premium from the earlier geopolitical conflict. After ships were blocked in the strait, vessels have accelerated their migration to the Atlantic China Welding Consumables, Inc. region, leading to an oversupply of cross-regional shipping capacity. In the medium to long term, global crude oil inventories are at historically low levels, and countries' strategic stockpiling will bring incremental demand for shipping, supporting further increases in freight rates.