HK Stock Market Move | COSCO SHIPPING Energy Transportation (01138) fell more than 5% in late trading. Expectations for the reopening of the strait have fluctuated somewhat, and institutions say the loss of oil shipping efficiency is irreversible.

COSCO SHIPPING Energy Transportation (01138) fell more than 5% in late trading. As of press time, it was down 5.71% at HK$17.68, with a turnover of HK$434 million. On the news front, VLCC spot freight rates and time charter rates have recently risen to historic highs, mainly driven by multiple factors including recovering volumes, longer voyage distances, and efficiency losses. As of September 25, Clarksons assessed VLCC-TCE at US$590,000 per day. With intensive disclosures of news related to U.S.-Iran negotiations, market expectations for the reopening of the Strait of Hormuz have fluctuated somewhat, and the market is concerned that extreme freight rates will be difficult to sustain. Changjiang pointed out that the loss of oil shipping efficiency is irreversible, and the record-high VLCC-TCE is only a prologue. Under the resonance of multiple factors, high cracking spreads are favorable to the sustainability of VLCC freight rates, while under the "national oil, national shipping" guarantee system, leading domestic oil shipping companies have the ability to steadily realize a high boom. It is expected that before geopolitical risks and the supply-demand pattern ease, oil shipping will enter a trend-driven one-way market, and it reiterates its bullish view on COSCO SHIPPING Energy Transportation and China Merchants Energy Shipping.