According to Xinhua News Agency on December 17, recently, due to a number of ships traveling to the Red Sea waters were attacked by Yemen's Houthi rebels, four international shipping companies have announced the suspension of navigation in the Red Sea.
Since the outbreak of the new round of Palestinian-Israeli conflict, the Houthis have repeatedly attacked targets in the Red Sea waters using missiles and drones, causing huge risks to international shipping and greatly reducing the stability of the first chain. With the advent of Christmas, New Year's Day and other holiday transportation seasons, the freight rate of the current shipping market has shown a significant upward trend.
On December 18, A-share shipping concept stocks stood out, Jinjiang Shipping (601083), COSCO Shipping Energy (600026), Haitong Development (603162), Ningbo COSCO (601022) and many other ** hit the daily limit, Phoenix Shipping (000520), COSCO Shipping Holdings (601919) and others rose more than 5%.
The international shipping industry is facing enormous challenges
The shipping industry is a cyclical industry, and its demand and industry prosperity are highly correlated with the macroeconomic cycle. Macroeconomic fluctuations, the development of coastal and hinterland economies, geopolitics, capacity demand and supply and other factors may have an impact on customer transportation demand, which in turn will affect market freight rates.
From December 14th to 15th, Maersk's container ships "Maersk Gibraltar", Hapag-Lloyd "Al Jasrah" and "MSC Palatium III" in the Mediterranean Sea were all attacked by missiles suspected to have been launched by Yemen's Houthi forces.
On December 15, Maersk asked all its containers to suspend navigation in the Red Sea. Subsequently, Hapag-Lloyd also made a follow-up statement, suspending the navigation of its container ships in the Red Sea. The Houthis have not responded to the condemnation by the relevant maritime groups, and fears may continue to spread among shipowners, and a wider bypass is likely.
According to public information, the Suez Canal is known as the "main artery" of international freight, handling about 12% of the world's cargo transportation through more than 1 trillion US dollars of cargo every year, and 30% of the containers ** and nearly 10% of the *** Bab el-Mandeb Strait is the throat of the Suez Canal. Ships passing through the Suez Canal must enter and exit the Red Sea through the Bab el-Mandeb Strait in the southern section of the Red Sea. The two passes are equally important to ensure the smooth flow of the "crossroads of world shipping". Yemen's Houthi-controlled area is adjacent to the Bab el-Mandeb Strait.
At present, the number of ships passing through the Suez Canal is increasing year by year, and as of the end of November 2023, the number of ships passing through the Suez Canal is 23,725, and the annual throughput will once again hit a record highBy the end of November 2023, the total volume of cargo passing through the Suez Canal exceeded 2 billion dwt, once again setting a new record high.
Guohai** believes that once the key shipping lanes are blocked, the upward risk of freight rates in the shipping sector will increase sharply. If the Suez Canal is blocked, these ships will have few options but to make a detour from the Cape of Good Hope in the southern section of Africa, which will add an additional 9,000 kilometers of range and 6-14 days of detour time. At the same time, some ships may be blocked in the canal or temporarily change the course, which will greatly reduce the cargo arrival rate and cause panic among cargo owners**.
According to incomplete statistics, the Suez Canal has been blocked 6 times in history due to war conflicts, ship grounding and other reasons, and the blockade time ranges from a few hours to 8 years, during which the catalysis of oil transportation and container ship freight rates is more significant.
The leading shipping stocks have a strong background
On December 18, A-share shipping concept stocks "soared", and many ** hit the daily limit.
Jin Jiang Shipping is a comprehensive shipping company, mainly engaged in international and domestic maritime container transportation business. The main services are liner transportation services and time charter services. The company is the only international container liner shipping enterprise in the system of Shanghai SASAC.
Relying on the controlling shareholder Shanghai Port Group, Jinjiang Shipping has natural port advantages, and from 2020 to 2022, it ranked first in the industry in terms of market share of Shanghai-Japan routes and Shanghai-cross-strait routes.
The company's operating income for the first three quarters of 2023 was 395.6 billion yuan, down 2333%；The net profit attributable to the parent company was 69.8 billion yuan, down 5295%。
COSCO SHIPPING Energy's main business is engaged in international and Chinese coastal ** and refined oil transportation, international liquefied natural gas (LNG) transportation and international chemical transportation. The main customers of the company's oil transportation business are large domestic and foreign enterprises. The largest shareholder of the company is China Shipping Group, and the actual controller is the State-owned Assets Supervision and Administration Commission.
COSCO SHIPPING Energy achieved operating income of 165 in the first three quarters of 20233.5 billion yuan, an increase of 33 over the same period last year37%。COSCO SHIPPING Energy achieved a net profit of 37 in the first three quarters of 20231.4 billion yuan, an increase of 480 over the same period of the previous year49%。
Ningbo COSCO's main business and services are international, coastal and Yangtze River route shipping business, ship business and dry bulk freight business. The parent company of Ningbo COSCO is Ningbo Zhoushan Port Co., Ltd., and the ultimate parent company is Haigang Group.
Ningbo COSCO is located in Ningbo, and its core port, Ningbo Zhoushan Port, ranked first in the world in terms of cargo throughput for the 14th consecutive year in 2022. In recent years, with Ningbo Zhoushan Port as the core, the company has created a route system that radiates the near ocean, coastal and along the Yangtze River, and has basically built a domestic trade network connecting the north and south coasts and along the Yangtze River, as well as a route network throughout Taiwan, Japan, South Korea and Southeast Asia, covering 38 major ports at home and abroad.
Ningbo COSCO achieved operating income of 33 in the first three quarters of 20231.7 billion yuan, down 4 percent from the same period last year82%。Ningbo COSCO achieved a net profit of 38.9 billion yuan, down 28 percent from the same period last year38%。
Haitong Development is mainly engaged in the dry bulk transportation business of domestic coastal and international oceans. The company's main products and services are domestic shipping area transportation business and overseas navigation area transportation business. After years of accumulation, the company has developed into one of the leading enterprises in the field of private dry bulk shipping in China. The largest shareholder and actual controller of the company is Zeng Erbin.
Haitong Development achieved operating income of 113.6 billion yuan, down 26 percent from the same period last year36%。Haitong Development achieved a net profit of 15.1 billion yuan, down 70 percent from the same period last year47%。
Haitong Development hit the daily limit today, the stock has risen 5 times in the past year, and the market may continue to rise in the future.