Guotai Haitong: Oil shipping rates have pulled back from highs, while dry bulk large vessel rates have stabilized somewhat

Guotai Haitong released a research report stating that two phases have achieved an oil shipping super bull market: in 2022, trade restructuring lengthened voyage distances, and in 2025, the benefits of crude oil production increases are materializing. Maintain an overweight rating on oil shipping; the continued high prosperity will exceed expectations. Oil shipping has entered a high-prosperity phase, and the escalation of the Middle East situation in 2026 provides an opportunity for gray market changes. It is recommended to pay attention to the continued impact of gray market changes; oil shipping is expected to see an ultra-high and sustainable prosperity, providing room for both performance and valuation. Guotai Haitong's main views are as follows: Focus on gray market changes: expected to increase compliant demand, accelerate the clearing out of old vessels, and achieve an ultra-high and sustainable prosperity Freight rate tracking: oil shipping rates have pulled back from highs, while dry bulk large vessel rates have stabilized somewhat. 1) Crude oil shipping: Iranian attacks and high freight rates have suppressed some demand; the industry expects the actual impact of the shadow fleet being unblocked to be limited; 2) Product oil shipping: trade recovery has driven freight rates high. Short-term quotas continue, medium-term trade restructuring, long-term refinery migration eastward; 3) Dry bulk shipping: falling iron ore prices have slowed mine shipments, and large vessel rates have stabilized somewhat. Focus on Simandou production increases in the future; 4) Container freight rates: main routes have entered the traditional off-season, and liner companies are expected to actively cut sailings to stabilize prices. Focus on European and American Christmas consumption Oil shipping: two phases achieve a "super bull market" Phase one: geopolitical conflicts drove global crude oil trade restructuring; Russia and Europe "seeking far over near" lengthened voyage distances, driving oil shipping prosperity upward across years for more than three years, with capacity utilization rising to the threshold. Phase two begins: global crude oil production increases begin, driving continued growth in oil shipping demand. The rigidity of effective tanker supply continues; going forward, supply and demand will continue to improve with prosperity rising, and there is an unexpected option from gray market changes. Dry bulk: long-distance iron ore production increases begin, prosperity is expected to gradually rise In 2021-22, benefiting from the ultra-high prosperity of the container shipping industry and demand spillover, container-to-bulk switching drove freight rate performance. In 2023-24, post-pandemic recovery growth drove a moderate rise in dry bulk shipping prosperity. The global iron ore production increase cycle has begun, especially the super-large Simandou project has been put into operation and will continue to increase production; demand growth exceeding expectations is anticipated. Supply will grow slowly in the coming years, and prosperity is expected to gradually recover. Container shipping: tariff easing returns to a new normal, focus on the new China-US trade landscape Two rounds of high prosperity in the past five years have raised the profit base. In the first half of 2025, China-US tariff frictions caused short-term sharp fluctuations in trade and freight rates; in Q3, trade returned to normal and the main-route peak season was not strong. In the coming years, main routes will again face ship upsizing and supply pressure; the suspension of Section 301 sanctions is in line with expectations; focus on the new China-US trade landscape and the economic impact of energy pressure. It is recommended to continue to focus on structural growth and opportunities in the container shipping market. Risk warnings Economic risks, risks of geopolitical changes, risks in the implementation of environmental protection policies, etc.