According to Huachuang Securities, the shipping industry's four major segments 鈥?oil tankers, dry bulk, container shipping, and specialized transport 鈥?maintained high prosperity levels in Q3 2026, with major shipping companies posting significant year-on-year earnings growth. In oil tankers, the VLCC Oman route averaged $175,000 per day in Q3, surging 394% year-on-year. China Merchants Energy Shipping (601872.SH) and COSCO SHIP ENGY (01138) recorded quarterly net profits attributable to shareholders of 5.02 billion yuan and 2.84 billion yuan respectively, both hitting historic highs, with even greater rate elasticity expected in Q4.
In dry bulk, the BDI averaged up 54% year-on-year, with Haitong Development (603162.SH) and China Merchants Energy Shipping's dry bulk business sustaining strong earnings growth. In container shipping, the CCFI averaged up 55% year-on-year, with COSCO SHIP HOLD (01919) posting Q3 net profit of 17.23 billion yuan, up 80.7% year-on-year. In specialized transport, benefiting from robust automobile exports, COSCO Shipping Specialized Carriers (600428.SH) saw Q3 net profit surge 147% year-on-year. Huachuang Securities continues to favor upward opportunities across all vessel types.
Oil Tankers: China Merchants Energy Shipping and COSCO SHIP ENGY Set New Q3 Records, Q4 Expected to Release Even Greater Elasticity
Since the start of this year, the oil tanker market has been influenced by multiple factors including geopolitical conflicts, shifts in supply-demand structure, trade changes reducing tanker efficiency, oil-exporting nations offering concessions to boost exports, and insufficient global effective refining capacity. These combined forces drove freight rates sharply higher into historically elevated ranges. In Q3 2026, the VLCC Oman route averaged $175,000 per day, up 394% year-on-year and 7.4% quarter-on-quarter (year-on-year and quarter-on-quarter growth rates calculated using Middle East and Red Sea routes as base periods respectively). The US Gulf and West Africa routes averaged $123,000 and $128,000 per day, up 253% and 250% year-on-year, and up 1.1% and 1.8% quarter-on-quarter (considering a one-month lag in revenue recognition, corresponding to June-August rates).
During Q3, Middle East crude oil shipments increased alongside growth in STS transfer volumes, Atlantic shipments also rose, and further tensions in the Red Sea pushed VLCC rates steadily higher. Small and medium crude tankers and product tankers lagged behind VLCCs in rate increases: in Q3 2026, Suezmax, Aframax, and product tanker rates averaged $166,000, $83,000, and $30,000 per day respectively, up 242%, 116%, and 31% year-on-year, and down 21%, 47%, and 53% quarter-on-quarter (considering the one-month revenue recognition lag).
In Q3 2026, the MR TC7 TCE averaged $29,000 per day, up 31.9% year-on-year and down 14.7% quarter-on-quarter (considering a two-week revenue recognition lag). Specifically, MR rates in July and August retreated from Q2 levels, then surged rapidly in September to set new year-to-date highs. The high-rate period fell only partially within Q3, with more falling into Q4.
Performance Results
For the first three quarters of 2026, net profit attributable to shareholders: China Merchants Energy Shipping 12.0 billion yuan, up 263% year-on-year; COSCO SHIP ENGY 7.39 billion yuan, up 172% year-on-year; China Merchants Nanjing Tanker 1.14 billion yuan, up 20.1% year-on-year. China Merchants Energy Shipping's tanker segment net profit reached 9.93 billion yuan, up 426% year-on-year. COSCO SHIP ENGY's foreign trade tanker gross profit was 8.03 billion yuan, up 353% year-on-year, with crude oil, product oil, and time charter gross profits at 6.56 billion, 640 million, and 880 million yuan respectively, up 570%, 51%, and 133% year-on-year.
For Q3 2026, net profit attributable to shareholders: China Merchants Energy Shipping 5.02 billion yuan, up 327% year-on-year and 19.7% quarter-on-quarter; COSCO SHIP ENGY 2.84 billion yuan, up 235% year-on-year and 20% quarter-on-quarter; China Merchants Nanjing Tanker 330 million yuan, down 13.5% year-on-year and 14.3% quarter-on-quarter. COSCO SHIP ENGY's foreign trade tanker gross profit was 3.41 billion yuan, up 590% year-on-year and 40.3% quarter-on-quarter; China Merchants Energy Shipping's tanker segment net profit was 3.745 billion yuan, up 528% year-on-year and 1% quarter-on-quarter.
Overall, driven by strong freight rates, the three tanker companies achieved significant year-on-year earnings growth in Q3, with China Merchants Energy Shipping and COSCO SHIP ENGY setting new historic quarterly net profit records. China Merchants Energy Shipping recognized 230 million yuan in asset disposal gains and 380 million yuan in investment income from selling aging Ro-Ro vessels and consolidating Antong, contributing the main quarter-on-quarter increment. COSCO SHIP ENGY's tanker business showed more pronounced quarter-on-quarter growth as trapped vessels exited the Gulf, while its Q3 income tax rate of 24% was elevated (versus 16-17% in 2024-2025 and approximately 19% in H1 2026), causing net profit growth to lag gross profit growth. China Merchants Nanjing Tanker underperformed the other two due to weaker MR East route rates in July-August and domestic bunker cost pressures.
Outlook
Middle East oil exports gradually recovered in September, high cracking spreads drove oil traders' stockpiling and transportation willingness, and factors such as route diversion and STS transfer modes consuming effective capacity pushed rates rapidly higher and kept them elevated. From September to date, VLCC Oman, US Gulf, and West Africa route rates averaged $720,000, $420,000, and $530,000 per day respectively, while MR TC7 route rates averaged approximately $65,000 per day since mid-September. Q4 earnings are expected to grow substantially.
We remain bullish on the oil tanker industry's prosperity: In the short term, the core contradiction between massive global oil inventory depletion and upstream producer export demand remains unresolved, compounded by high cracking spreads driving refinery import demand. Meanwhile, against a backdrop of persistent geopolitical risk, dark fleet sailing and route diversions erode efficiency, bottlenecks in crude oil transportation are prominent, and the upward trend in the rate center is clear. In the medium to long term, restocking plus the potential shift of Iranian oil to compliant markets plus capacity expansion and import diversification constitute three demand-side increments. On the supply side, scrapping of aging capacity is expected to offset new vessel deliveries, and Sinokor's VLCC buying spree is a market structural logic that cannot be ignored.
Dry Bulk: High Prosperity in Q3, Earnings Continue Strong Year-on-Year Growth
Market Review
In Q3 2026, the dry bulk shipping market maintained high levels, with the BDI averaging 3,041 points, up 54% year-on-year and 11% quarter-on-quarter. By vessel type, Capesize vessels continued to rely on iron ore and bauxite long-haul demand support, surging early in the quarter before retreating; Panamax vessels maintained relatively high-level fluctuations due to strong grain demand and typhoon disruptions; Handysize vessels continued to rise after consolidation.
Performance Results
For the first three quarters of 2026: Haitong Development net profit attributable to shareholders 820 million yuan, up 224% year-on-year; China Merchants Energy Shipping's dry bulk business net profit 1.84 billion yuan, up 158% year-on-year. For Q3 2026: Haitong Development net profit 295 million yuan, up 78% year-on-year and down 5.7% quarter-on-quarter; China Merchants Energy Shipping's dry bulk business net profit 660 million yuan, up 127% year-on-year and down 11% quarter-on-quarter. Pacific Basin Shipping's Handysize and Supramax dry bulk TCE in Q3 2026 were $16,000 and $18,000 per day respectively, up 37% and 34% year-on-year, and down 1.2% and 5.7% quarter-on-quarter, with excess returns of 9% and -2% respectively. The reason Supramax vessels underperformed the index in Q3 is the trans-ocean spread between Atlantic and Pacific freight rates; the company proactively arranged vessels for reverse voyages, deploying ships to the high-rate Atlantic region, sacrificing short-term Q3 spot revenue to position early for the traditional Q4 Atlantic peak season.
Overall, dry bulk rates remained elevated in Q3 2026, with dry bulk companies sustaining strong year-on-year earnings growth while quarter-on-quarter growth moderated, possibly due to some voyage settlement timing mismatches or more pronounced Q2 excess returns.
Outlook
Since late September, the BDI has continued to decline due to contraction in iron ore shipments, with Capesize rates retreating noticeably, while Supramax rates remained firm, reflecting stable demand for minor bulk commodities. The BDI correction has stabilized in the short term from a trend perspective, and from a seasonal angle, late November is expected to enter the year-end shipping peak season; simultaneously, El Nino weather may catalyze peak season rates. The World Meteorological Organization expects El Nino to continue strengthening and peak in December.
We remain bullish on the dry bulk market's upside potential: 1) Supply-side growth is limited, with Clarksons forecasting industry capacity growth of 3.9%, 4.3%, and 4.1% for 2026-2028 respectively. Under tightening environmental policies, dry bulk vessel speeds continue to decline, and increasing special survey vessel numbers affect effective capacity. 2) Simandou iron ore production constitutes a core catalyst. Simandou is a super-scale iron ore project with deep Chinese corporate participation, expected to break the existing Australia-Brazil dominated iron ore supply landscape. The Simandou project officially commenced production at end-2025, and its shipping distance to China is three times that of Australia. If it substitutes Australian imports, reaching full capacity by 2030 could cumulatively boost global iron ore seaborne demand by 9.4%.
Container Shipping: Q3 Rates Continued Rising, Earnings Growth Outstanding
Market Review
Foreign trade container shipping market: European and American demand showed resilience, combined with Middle East conflicts, port congestion, and Panama Canal water level declines, driving Q3 container rates continuously higher. In Q3 2026, the CCFI averaged 1,867 points, up 55% year-on-year and 38% quarter-on-quarter. Different routes showed divergence: 1) Mainline routes: Q3 2026 CCFI Europe and Mediterranean routes up 36% and 47% year-on-year, and up 36% and 33% quarter-on-quarter; US West and US East up 85% and 72% year-on-year, and up 58% and 60% quarter-on-quarter, meaning US routes outperformed Europe-Mediterranean routes on both metrics. 2) Feeder markets: Q3 2026 CCFI Southeast Asia route up 29% year-on-year and 8% quarter-on-quarter, underperforming mainlines. 3) Emerging markets: Q3 2026 CCFI Persian Gulf-Red Sea and South America routes up 167% and 67% year-on-year, and up 50% and 62% quarter-on-quarter. The Persian Gulf-Red Sea route saw the most significant geopolitical premium, hence its top ranking among all routes. The South America route benefited from Brazil tariff adjustment expectations, early cargo shipments by shippers, and port congestion, with notable rate gains.
In the foreign trade time charter market, feeder vessel charter rates rose steadily. In Q3 2026, 4,250 TEU and 2,500 TEU container ship 6-12 month charter rates were $63,000 and $38,000 per day respectively, up 18% and 8.6% year-on-year. In the domestic container shipping market, rates declined, with Q3 2026 PDCI averaging 968 points, down 9% year-on-year.
Performance Results
For the first three quarters of 2026, net profit attributable to shareholders: COSCO SHIP HOLD 30.65 billion yuan, up 13.2% year-on-year; Jinjiang Shipping 1.23 billion yuan, up 3.5% year-on-year; Zhonggu Logistics 1.93 billion yuan, up 36.7% year-on-year; China Merchants Energy Shipping's container shipping segment net profit 1.56 billion yuan, up 50% year-on-year. For Q3 2026, net profit attributable to shareholders: COSCO SHIP HOLD 17.23 billion yuan, up 80.7% year-on-year and 128.5% quarter-on-quarter; Jinjiang Shipping 480 million yuan, up 21.8% year-on-year and 14.2% quarter-on-quarter; Zhonggu Logistics 850 million yuan, up 149% year-on-year and 52% quarter-on-quarter; China Merchants Energy Shipping's container shipping segment net profit 980 million yuan, up 138% year-on-year and 198% quarter-on-quarter.
Consistent with rate trends, COSCO SHIP HOLD benefited from mainline rate increases, with Q3 results exceeding expectations. Jinjiang Shipping, operating in the intra-Asia market, saw weaker Q3 rate gains than mainlines, hence its slower earnings growth versus COSCO SHIP HOLD. Zhonggu Logistics contributed earnings increment from its Middle East/Red Sea route deployment. China Merchants Energy Shipping consolidated Antong, enhancing container shipping profitability.
Outlook
Clarksons forecasts 2026 container shipping supply growth of 4.7% and demand growth of 4.2%. Considering the disruptive effects of Middle East conflicts, tariff policies, and port congestion on existing route networks, we expect the container shipping market to remain in a tight supply-demand balance this year. We expect Q4 rates to remain at relatively high levels and continue to favor upward earnings revisions for container shipping companies in H2, with dividend yields remaining attractive.
Specialized Transport: Automobile and Wind Power Export Prosperity Continues, COSCO Shipping Specialized Carriers' Q3 Profitability Rises Further
In the first three quarters, China's goods trade exports grew 16% year-on-year, showing high prosperity. The equipment manufacturing industry contributed nearly 90% of export increment, with electric vehicles, lithium batteries, wind turbine generators and parts growing 72.3%, 36.4%, and 22.4% respectively. In Q3 2026, China exported 3.11 million vehicles, up 69% year-on-year and 8.3% quarter-on-quarter. Benefiting from this, Q3 2026 6,500-vehicle PCTC 1-year time charter rates averaged $87,000 per day, up 93% year-on-year and 36.8% quarter-on-quarter; Q3 2026 MPP market rates averaged $21,000 per day, roughly flat year-on-year and quarter-on-quarter.
COSCO Shipping Specialized Carriers reported first three quarters 2026 revenue of 22.6 billion yuan, up 36% year-on-year; net profit attributable to shareholders of 2.62 billion yuan, up 97% year-on-year. Q3 2026 revenue was 8.19 billion yuan, up 40% year-on-year and 3.7% quarter-on-quarter; net profit attributable to shareholders was 1.25 billion yuan, up 147% year-on-year and 29% quarter-on-quarter. The company's automobile, wind power, and engineering equipment cargo volume proportions rose to 21%, 9%, and 8%, totaling 38%, and it is expected to continue benefiting from energy transition and Chinese manufacturing going global.
Investment Recommendation: Continue to Favor Upward Opportunities Across All Vessel Types
1. Oil Tankers: Bullish on the Arrival of a Major Cycle
In the short term, the core contradiction between massive global oil inventory depletion and upstream producer export demand remains unresolved, compounded by high cracking spreads driving refinery import demand. Against persistent geopolitical risk, dark fleet sailing and route diversions erode efficiency, crude oil transportation bottlenecks are prominent, and the upward trend in the rate center is clear. In the medium to long term, restocking plus Iranian oil shifting to compliant markets plus capacity expansion and import diversification constitute three demand-side increments. On the supply side, scrapping of aging capacity is expected to offset new vessel deliveries, and Sinokor's VLCC buying spree is a market structural logic that cannot be ignored. Continue to strongly recommend China Merchants Energy Shipping and COSCO SHIP ENGY, and favor China Merchants Nanjing Tanker.
2. Dry Bulk: Rates Running Firm, Bullish on Upside Potential
Supply growth is limited, with dry bulk vessel orderbooks at approximately 16%, the lowest among shipping's three major sectors. On the demand side, Simandou production extends shipping distances, and subsequent El Nino weather may catalyze peak season rates. Recommend China Merchants Energy Shipping, Haitong Development, and Pacific Basin Shipping.
3. Container Shipping: H2 Earnings Expected to Accelerate Upward, Dividend Yields Attractive
Supply-demand is expected to remain in tight balance this year. We expect Q4 rates to remain at relatively high levels and continue to favor upward earnings revisions for container shipping companies in H2, with attractive dividend yields. Recommend COSCO SHIP HOLD, Jinjiang Shipping, and Zhonggu Logistics; suggest watching SITC International and TS Lines.
4. Specialized Transport: Bullish on High Prosperity from Chinese Automobile Exports and Offshore Wind Power Construction Demand, with Key Recommendation on COSCO Shipping Specialized Carriers.
Risk Warnings: Sharp spot rate declines, demand falling short of expectations, geopolitical event impacts, etc.
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