China Securities Co., Ltd.: The freight rates of container shipping have fallen, while the freight rates for oil transportation and dry bulk cargo have increased.

China Securities Co., Ltd. released a research report stating that the concentration of additional trans-Pacific sailings into the market weakened the support formed by the early rush and price increases due to the reduction of new cabin space; European and American restocking and peak season cargo volumes are still present, and the market freight rates may remain at high levels. Expectations of a ceasefire between the US and Iran have fluctuated, and the risks to maritime security have increased, with disruptions in the Strait of Hormuz resulting in ship waiting times, detours, and increased costs of war risk, reducing effective capacity and raising the risk premium for oil tankers; if risks persist, the oil shipping market may still have some support. The bulk cargo market has warmed up, with freight rates for bulk commodities significantly increasing. The improvement in the Capesize ship market has driven the index upward, with increased demand for long-haul route capacity for commodities such as iron ore, further amplifying the elasticity of freight rates. Key points from China Securities Co., Ltd. are as follows: Industry Overview In terms of relative performance compared to the Shanghai and Shenzhen 300 Index, the transportation sector overall declined during the week of July 6th to July 10th. The shipping sector saw a decline of 2.57% during the week, while the port sector saw an increase of 0.30%. Shipping Ports The combined shipping rates fell, with increased capacity for oil transportation and dry bulk freight leading to increased supply and lower rates. This week, the SCFI reported 3815 points, a decrease of 4.27% compared to the previous week. The concentration of new trans-Pacific sailings entering the market has reduced the support of early rush and price increases. Additionally, the demand for European and American restocking and peak season cargo volumes may keep market freight rates at high levels. Increased tensions in the Middle East driving up oil transportation rates This week, the BDTI increased by 9.43% to 2031 points, and the BCTI increased by 2.44% to 1048 points. Expectations of a ceasefire between the US and Iran have fluctuated, leading to increased risks to maritime security. Disruptions in the Strait of Hormuz have caused ship delays, detours, and increased costs of war risk, reducing capacity and raising the risk premium for oil tankers. The increase in oil tanker rates is stronger than for refined oil tankers; future oil transportation rates are still supported. Bulk cargo market warming up, significant increase in dry bulk freight rates This week, the BDI increased by 8.36% to 2944 points. The improvement in the Capesize ship market has led to an increase in the index, with increased demand for long-haul route capacity for bulk commodities such as iron ore, further increasing the elasticity of freight rates due to low available capacity in the previous period. Risk analysis Policy risks resulting from changes in global liner alliance regulatory policies; global trade risks under ongoing escalation of Russia-Ukraine conflict; regional conflict risks in Iran; significant increase in fuel costs.