According to a research report released by China Securities Co., Ltd. (also known as CSC Financial), container shipping demand has been generally stable while rates on most routes have pulled back. The SCFI was flat week-on-week; US West and US East routes saw slight corrections after prior gains, Europe and the Mediterranean continued to slide on weak demand, and South America posted an expanded decline; Southeast Asia routes saw stable demand and the regional index extended its advance. The international oil shipping index continued to climb, with crude tankers diverging at high levels. The BDTI and BCTI rose 10.2% and 9.7% week-on-week respectively; Middle East–China VLCC earnings edged up and remained at extremely high levels, US Gulf–China continued to strengthen, and West Africa–China pulled back from highs. Product tankers stayed strong, with Middle East LR long-haul routes tight on tonnage and transatlantic MR relatively steady. Dry bulk daily rents rose across all vessel types, led by Panamax. The BDI gained 3.1% week-on-week; Capesize was supported by Atlantic cargoes and tightening tonnage while the Pacific market faced relative pressure; Panamax led gains on increased Atlantic cargoes and tight prompt tonnage; Supramax and Handysize moved up modestly. The main views of China Securities Co., Ltd. are as follows:
Container shipping: overall index flat, most route rates retreat
This week, China's export container shipping demand was broadly stable, rates on most ocean routes pulled back, and the composite index ended its streak of gains. On September 24, the Shanghai Containerized Freight Index (SCFI) stood at 3,686.62 points, unchanged week-on-week. The market showed a divergent pattern of "declines in Europe, the Americas and South America, gains in the Persian Gulf and Southeast Asia": European import demand lacked growth momentum; transport demand on Americas routes was generally stable, but spot rates adjusted after earlier increases; the supply-demand fundamentals on South America routes weakened, and the rate decline widened further. Meanwhile, Middle East tensions and Red Sea security risks continued to lift the Persian Gulf route risk premium, while the Southeast Asia market extended its rise on stable cargo volumes. Overall, the container shipping market currently lacks a unified direction, and regional demand, capacity deployment and geopolitical risks will continue to dominate the performance of individual routes.
Americas routes: US West and US East rates fell in tandem. The US September composite PMI rose to 58.4, economic activity remained in expansion, and transport demand was generally stable, but the market's ability to absorb earlier rate increases weakened. On September 24, market rates from Shanghai Port to US West and US East base ports were USD 7,463/FEU and USD 10,497/FEU respectively, down 1.3% and 0.8% week-on-week. Supply and demand on US routes have not yet weakened noticeably, and US East rates remain above USD 10,000. Asia-Europe and Mediterranean routes: rates continued to fall, with insufficient demand-side support. The eurozone September consumer confidence index fell to -16.5, and end-user consumption and import demand remained weak. This week, cargo volumes lacked further growth momentum. On September 24, the market rate from Shanghai Port to Europe base ports was USD 2,313/TEU, down 4.6% week-on-week; the Mediterranean base port rate was USD 3,065/TEU, down 1.9% week-on-week. With demand recovery slow and booking appetite insufficient, carriers' capacity control measures have yet to reverse the downward rate trend, and the Europe route is expected to remain weak in the short term. Latin America routes: South America rates fell sharply. On September 24, the market rate from Shanghai Port to South America base ports was USD 6,530/TEU, down 15.2% week-on-week, the largest decline among major routes this week. Transport demand growth is currently anemic, market supply and demand have loosened further, and a wait-and-see mood among cargo owners along with carriers competing for cargo pushed spot quotes lower. In the short term, downward pressure on South America route rates has not fully dissipated. Intra-Asia routes: Southeast Asia rates continued to rise, with divergent performance by route. The Southeast Asia Containerized Freight Index stood at 5,794.79 points, up 3.3% week-on-week. Regional transport demand was generally stable, but cargo volumes and slot supply-demand differed across routes, with rates rising and falling in a mixed pattern. Overall, the Southeast Asia market still has stable cargo volume support and is expected to remain in high-level oscillation in the short term.
Oil shipping: index rose again week-on-week, VLCCs diverged at high levels
This week the international oil shipping market remained strong, but crude tanker routes began to diverge. On September 24, the BDTI stood at 5,250 points, up 10.2% week-on-week; the BCTI stood at 2,099 points, up 9.7% week-on-week. Navigation restrictions in the Strait of Hormuz and the southern Red Sea continued to disrupt Middle East crude exports, with Gulf transshipment, offshore lightering and vessel waiting absorbing substantial effective tonnage, keeping the risk premium elevated. However, after the earlier rapid rise, transaction pace on some VLCC routes slowed, and the market shifted from broad gains to high-level divergence. Middle East routes: Middle East–China VLCC earnings edged up at high levels. On September 24, the TCE on the Middle East Gulf–China TD3C route was about USD 1,235,400/day, up 1.9% week-on-week. Although bargaining between owners and charterers intensified at extremely high rate levels, strait navigation restrictions, Oman Gulf transshipment delays and large numbers of vessels tied up in waiting and lightering continued to keep effective tonnage tight, and rates remained at historic highs. US Gulf routes: US Gulf–China rates continued to rise. On September 24, the TCE on the US Gulf–China TD22 route was about USD 407,100/day, up 4.8% week-on-week. Disruption to the Middle East supply chain prompted buyers to focus more on long-haul Americas supply, and longer voyages further amplified ton-mile demand; at the same time, a large number of VLCCs were absorbed by Middle East and Oman Gulf business, supporting transatlantic cross-regional rates. West Africa routes: West Africa–China rates pulled back from highs. On September 24, the TCE on the West Africa–China TD15 route was about USD 507,100/day, down 3.3% week-on-week. After the earlier rapid rate increase, charterers' acceptance declined and market transactions slowed, but the suction effect of Middle East tonnage persists, available vessel supply in West Africa is limited, and the absolute rate level remains high. Product tankers: market remained strong, with LR long-haul routes standing out. The BCTI rose 9.7% week-on-week; supply of LR2 and LR1 vessels in the Middle East was tight, and long-haul routes continued to find support; transatlantic MR cargoes were relatively steady, with performance diverging across regions. In the short term, geopolitical conflicts and the restructuring of refined product trade flows will continue to support the product tanker market.
Dry bulk market: daily rents rose across vessel types, led by Panamax
This week the dry bulk shipping market rose overall, with Panamax leading gains, Capesize oscillating at high levels, and Supramax and Handysize rising modestly. On September 24, the Baltic Dry Index (BDI) stood at 3,473 points, up 3.1% week-on-week; Capesize daily rent was USD 53,864/day, up 3.0% week-on-week; Panamax was USD 21,434/day, up 5.8% week-on-week; Supramax was USD 22,525/day, up 0.9% week-on-week; Handysize was USD 18,061/day, up 1.6% week-on-week. Capesize was supported by increased Atlantic iron ore cargoes and tightening prompt tonnage in the North Atlantic, with daily rents continuing to rise, but relatively loose cargo-tonnage matching in the Pacific limited overall gains. Panamax performed strongest, with increased Atlantic grain and ore cargoes and tight prompt vessel supply, while Australian and North Pacific cargoes also provided support, and Indonesian coal market activity recovered somewhat. Supramax rose modestly on support from North Pacific and Indonesian cargoes and European scrap steel transport demand; Handysize performed relatively steadily, driven by inquiries from the US Gulf and South America's east coast. Overall, all vessel types found cargo support, but regional performance still differed, and high-level oscillation is expected to continue in the short term.
Review: rates surged in the first half of 2026, Hormuz blockade pushed up fuel costs, tariff front-loading triggered an early peak season, and multiple factors combined to produce rising volumes and prices
In the first quarter, after the Chinese New Year, the container shipping market entered its traditional slow season and rates declined normally. But by late February, war between the US and Iran suddenly broke out, the Strait of Hormuz was blockaded, international oil prices surged, fuel costs spiked, and companies were forced to pass fuel costs on to freight rates, driving rates sharply higher; at the same time, to avoid the adverse effects of war, several shipping companies rerouted Suez Canal services around the Cape of Good Hope, greatly lengthening voyages and reducing effective capacity supply; combined with carriers adding war surcharges, rates on global routes soared in a short period, and within one month of the war's outbreak, the SCFI composite index rose about 37%. Entering the second quarter, the geopolitical conflict in the Middle East continued to affect rates, and the "rush to ship" wave triggered by tariff policy adjustments pushed container rates steadily higher. By route, South America routes were affected by Brazil's partial tariff increase on June 1, with merchants concentrating early shipments, leaving route capacity tight, and in May the South America route SCFI index nearly doubled; North America routes were affected by policy factors including the July 24 re-imposition of US Section 301 tariffs and the upcoming implementation of new Consumer Product Safety Commission (CPSC) rules, and a "rush to ship" wave erupted in May, with the US West and US East route SCFI indices rising 52.4% and 44.5% respectively within one month; Southeast Asia and Africa routes saw rates continue to rise on increased trade volumes; in addition, some Southeast Asian ports were hit by both power shortages and port congestion, further intensifying capacity tightness and pushing route rates higher; meanwhile, because Americas routes saw surging demand and fat profits, they siphoned off large numbers of vessels and container resources originally intended for Southeast Asia and Europe routes, causing other global routes to passively cut capacity and pushing up the overall global rate level; the Persian Gulf route saw rates rise due to geopolitical conflict, while actual volumes were only about 40% of the same period. Overall, shipping companies achieved profit levels exceeding market expectations in the first half of 2026. In terms of trade volumes, Asia's trade with North America declined in 2025, but growth in trade with Africa, South America, Southeast Asia and Europe offset the decline on North America routes. In January–April 2026, Asia's trade with Africa and Oceania grew 28.23% and 16.67% year-on-year respectively; affected by the rush to ship caused by Brazil's tariff adjustment, Asia's trade with South America rose 18.36%; on the Europe side, benefiting from a sharp increase in demand for new energy products, which effectively filled the gap left by traditional products, trade volume rose 14.27% year-on-year; affected by the expiry of the July US tariff policy node, Asia's trade with North America exploded in May, growing about 18% year-on-year. Overall, the container shipping market in the first half showed rising volumes and prices.
Outlook: rates are expected to peak and fall in the second half; over the medium to long term, rate volatility will increase while the center remains relatively high
(1) Middle East conflict cooling, lower fuel costs and the landing of Americas tariff policies create a strong expectation that rates will peak and decline. On June 22, the US and Iran signed a memorandum of understanding announcing a 60-day ceasefire in the strait, after which Iran announced that strait navigation would resume; geopolitical risk expectations fell sharply, international oil prices quickly retreated, and by June 26 they had returned to pre-conflict levels, greatly reducing carriers' fuel costs; at the same time, as Brazil's tariff reform officially landed and the US tariff adjustment policy node approached, rush-shipping demand will weaken, demand will return to normal shipment rhythms, and tight capacity conditions will ease; lower fuel costs combined with normalizing demand create a strong expectation of a short-term container rate pullback. (2) Supply-side short-term positives, medium-to-long-term pressure; Red Sea resumption remains the decisive factor. In terms of new supply, about 1.5 million TEU of capacity is expected to be delivered in 2026, with nominal capacity growth of about 3.7%, the lowest in the past three years; however, 2027, 2028 and 2029 are expected to see deliveries of 3.4 million, 3.7 million and 2.5 million TEU respectively, and the supply side will face considerable pressure in the future. Yet currently 36% of the industry's fleet is over 15 years old and 16% is over 20 years old. If the market can effectively phase out vessels over 20 years old over the next five years, capacity supply will not fluctuate dramatically. Over the medium to long term, the impact of new supply on the market is uncertain, and whether the Red Sea can resume normal navigation remains the decisive factor. The Red Sea crisis caused the global container shipping fleet to lose about 10% of its capacity; a short-term Red Sea resumption would release a large amount of capacity and worsen port congestion, but medium-to-long-term supply increases will still put significant pressure on rates. (3) Uncertainty in countries' tariff policies toward China will continue to disturb rates. China's exports were strong in the first half of 2026; in the first five months of 2026, China's total goods exports were RMB 11,913.7 billion, up 11.8% year-on-year. In the first five months, China's exports to ASEAN, the EU and Belt and Road countries grew 13.5%, 7.7% and 10.4% respectively. In the first five months of 2026, container throughput at China's major ports all rose, with throughput growth at major foreign-trade container ports reaching over 7%. China's trade surplus already hit a record high in 2025, and the rapid export growth in the first half of 2026 is expected to further raise China's trade surplus level; in May 2026 China's trade surplus was USD 105.43 billion, higher than USD 102.72 billion in the same period of 2025. The continued rise in the trade surplus may trigger changes in other countries' tariff policies toward China. At present, some countries are continuously strengthening scrutiny of Chinese goods; the EU has been advancing trade investigations in areas such as electric vehicles, steel and solar, and ASEAN countries are increasingly wary of Chinese goods "transshipping" through the region to export to Europe and the US, and future tariff actions targeting Chinese exports may become more frequent. Frequent tariff disruptions will increase rate uncertainty. Whenever a tariff window approaches, cargo owners concentrate early shipments, slots quickly tighten, and spot rates spike; after the window closes, demand that has been front-loaded forms a vacuum, and rates quickly fall back. The repeated recurrence of this pattern makes the traditional peak and off seasons disappear, and the rate cycle will be disrupted by tariff policy nodes, with rate volatility significantly expanding. (4) Container port congestion has become normalized, container turnover efficiency has declined, and supply chain uncertainty has increased. In recent years, global port congestion has gradually worsened, and current global port congestion levels have matched those during the global public health event, with Northeast Asia suffering the most severe congestion, accounting for 40% of total congested capacity, while Southeast Asia and the Mediterranean each account for 10% of total congested capacity. The root cause of port congestion lies in the continued expansion of the container fleet over the past few years and the long-term lag in port infrastructure investment. In addition, port congestion lengthens container dwell time at ports and worsens the geographic mismatch of empty containers, making actual usable container volume significantly lower than the nominal number; combined with disruptions such as extreme weather and strikes, container capacity losses are difficult to repair effectively in the short term, objectively forming a sustained hidden constraint on capacity supply in the global container shipping market. Overall, there is a strong expectation that container rates will fall from highs in the second half of 2026. In the short term, both demand and costs are weakening simultaneously. The first-half rush-shipping wave overdrew subsequent cargo demand, creating a transport demand vacuum; at the same time, falling oil prices lower carriers' operating costs and weaken their incentive to maintain high rates. The two factors together constitute the reasons for the expected rate decline in the second half. Over the medium to long term, the Red Sea resumption process on the supply side remains the decisive variable—once normal navigation resumes, rerouted capacity will return on a large scale and effective supply will expand significantly; concentrated deliveries of new capacity in 2027–2029 will also intensify supply pressure, but the proportion of elderly vessels in the global fleet is relatively high, and if the phase-out of aging capacity accelerates, it could offset part of the new supply and keep total capacity in a relatively reasonable range. On the demand side, China's exports remain in a growth trend, and the outlook is relatively optimistic; adjustments in countries' tariff policies toward China will disturb companies' shipment rhythms, and combined with factors such as tightening of China's export tax rebate policy, periodic rush-shipping behavior may become the new normal, increasing rate volatility. Taken together, the container shipping market will face pressure on rates in the second half of 2026. Looking at a longer cycle, the interplay of tariff policy games, geopolitical disruptions and global port congestion will continue to raise supply chain uncertainty, the traditional cyclical pattern of rates will tend to weaken, and volatility will increase. Nevertheless, the long-term growth underpinning of demand and rigid supply-side constraints have not fundamentally reversed, and the rate center still has the fundamental support to remain at a relatively high level.
Oil shipping: gradually moving toward a compliance-driven bull market
The Russia-Ukraine conflict changed the global crude oil supply landscape. Due to constraints on Russian oil, the EU and other countries greatly reduced dependence on Russian oil, and Russian oil shifted to supplying Asia. At the same time, other oil producers such as the US and Brazil expanded output, and some African countries withdrew from OPEC, causing OPEC's share to gradually decline while leaving market room for other countries to increase production. Entering 2025, OPEC changed its previous production-cut strategy, shifted to output increases, and entered a phase of substantive increases. Although production increases do not necessarily mean an increase in seaborne crude exports, actual seaborne trade volume data observed since August did increase, effectively driving a substantial rise in crude tanker freight rates. Although China's seaborne crude imports were weak in 2024 and early 2025, the trend in recent months has been stronger, with third-quarter imports up 5% year-on-year. Firm refinery throughput also provided an additional boost to imports. In 2025, about 14.8 million barrels per day of crude was processed on average, up 3% year-on-year, with third-quarter throughput up 7% year-on-year. In the first half of this year, higher import taxes on fuel oil and asphalt supported this momentum, prompting independent refiners to shift toward processing more crude. Growing demand for petrochemical feedstocks also provided support, while refinery maintenance schedules have decreased in recent months, especially at state-owned plants. A marked acceleration in inventory activity and increased refinery throughput drove stronger import demand, and higher Chinese cargo volumes also provided potential support for the crude tanker market this year. China's crude oil inventory days of cover rose to 110 days; so far China's strategic plus commercial crude inventories have increased by 150 million barrels, worth about USD 10 billion. They are expected to rise to 140–180 days in the future, mainly because: (1) current oil prices are at historically relatively low levels, providing a window for strategic purchases; (2) the new Energy Law effective in 2025 requires both state-owned and private enterprises to share strategic reserve obligations, creating institutional accumulation momentum; (3) about 20–30% of oil imports come from countries sanctioned by Europe and the US, posing supply disruption risks, and increasing reserves is preparation for potential crises (including geopolitical situations); (4) large current account surpluses provide foreign exchange funds for buying crude. Refining capacity continues to expand (expected to exceed 18 million barrels per day in 2026), supporting crude demand. Continued inventory momentum may support imports into 2026, state oil companies will further add 169 million barrels of crude storage capacity, and a further slowdown in oil prices may also provide support. China's seaborne crude imports were initially expected to grow 3% next year to 10.7 million barrels per day, but there may be further upside. Due to expanded sanctions by Europe and the US on the shadow fleet, especially since early 2025 when the US increased sanctions on the shadow fleet, effective market capacity has shrunk, pushing up the rate center and increasing rate elasticity during peak seasons. At present, about 16% of the VLCC fleet consists of restricted vessels, and the share of Aframax vessels closely linked to Russia has reached 33%. Although newbuilding prices have softened somewhat recently, overall secondhand vessel transaction values are still rising, partly related to the recent sharp increase in rents. Assuming a 10-year-old vessel whose newbuilding price in 2015 was about USD 95 million, depreciated over 20 years with no residual value, its current book value is USD 47.5 million, but its market value has reached USD 88 million, an appreciation rate of 85%. Although supply pressure will increase somewhat in 2026, limiting the height of rates, aging remains severe and the rate center is gradually moving upward.
Special transport: exports of the "new three" drive market demand, and special cargo export prosperity continues
As of August 2025, China's total exports of clean energy technologies hit a new high, with total value exceeding USD 141 billion. Europe is almost the largest import region for China's clean energy products. The Middle East, Latin America and Africa are the regions with the greatest growth potential in the future. Due to the increasing size of new energy equipment, product transport is gradually shifting from containerized transport to special cargo transport, especially for products such as wind power equipment and energy storage cabinets.
Risk warnings
Policy risk from changes in global liner alliance regulatory policies. In response to high container shipping rates, the US National Industrial Transportation League (NITL) and others have pressured authorities to intervene in liner alliances' antitrust immunity. In the short term, there is little evidence that liner alliances engage in monopolistic pricing; the EU has consistently refused to take intervention action against liner companies, believing that shippers enjoy benefits brought by liner alliances such as increased sailing frequency, broader route coverage and fewer transshipments. Over the medium to long term, if high rates in the container shipping industry persist, the US government or the EU may re-examine the existence of global liner alliances, or there may be container shipping market volatility risk caused by changes in global liner alliance regulatory policies. Global trade risk under continued escalation of the Russia-Ukraine conflict. The Russia-Ukraine conflict remains deadlocked, which will severely affect trade on routes related to Europe and Russia, bring about a collapse of the global shipping system, and even create a risk of regression in globalization. Investors are advised to closely monitor the evolution of the war situation, energy policy and sanctions developments. Iran regional conflict risk. If the Iran regional conflict continues, it will affect global energy-related routes and bring negative effects to the global energy transport system. Investors are advised to closely monitor the evolution of the war situation, energy policy and sanctions developments. Risk of a sharp increase in fuel costs. Affected by fluctuations in international crude oil prices, carriers' fuel costs face the risk of a sharp increase. Second, Singapore is the world's largest consumer and distribution center for fuel oil, and geopolitics may affect Singapore's fuel oil production, thereby causing fuel costs to rise sharply. Finally, environmental regulations and policies of the IMO and various governments may significantly increase carriers' fuel costs. Historically, the 2020 global sulfur cap brought huge changes to the consumption structure of the bonded marine fuel market; low-sulfur fuel oil, MGO, LNG and other clean alternative fuels all greatly increased marine fuel costs, thereby bringing severe price fluctuations.
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