The Zhitong Finance App learned that Huatai Securities released a research report saying that up to now, although some Red Sea routes have been restored, there is still uncertainty about the development of the situation. The Red Sea is an important channel for routes from Asia to Europe. Every year, about 30% of shipping routes enter Europe from the Asia-Red Sea-Suez Canal (according to Clarksons data). The global logistics supply chain is once again disrupted, and European freight rates have jumped sharply. As of January 1, SCFI's Shanghai to Europe/Shanghai to Mediterranean route freight rates rose 80%/70% from week to week. It is expected that due to this incident, Europe/Mediterranean route freight rates will rise further month-on-month in January; the oil transport/dry distribution market is in a seasonal low season, and the impact on short-term freight rates is limited. It is recommended to pay close attention to the impact of subsequent developments on global supply chain disruptions. If it continues for a long time, it will gradually spread to other shipping routes and oil transport/dry bulk freight rates.

▍ The main views of Huatai Securities are as follows:

European route freight rates have jumped sharply, and other routes are gradually being introduced

Affected by the Red Sea incident, the shipping market once again faced supply chain disruptions and shipping schedule delays. A number of shipping companies announced that some routes would detour to the Cape of Good Hope, resulting in an increase in overall flight time by about 20 days. As of January 1, SCFI (Shanghai Container Export Freight Index) rose 24% from December 1 (before the incident), with Shanghai to Europe/Mediterranean routes rising sharply by 217%/177%;

Other routes are gradually being promoted, and routes from Shanghai to the Western/East/Southeast Asia region increased by 55%/46%/8%. It is expected that due to short-term detours, freight rates for various routes will rise further from week to week in January. We need to pay close attention to the development and sustainability of subsequent developments.

The short-term impact of oil transport/dry dispersion is limited, and the medium- to long-term effects require close attention to the continuity of the situation

According to Clarksons data, the Red Sea waterway has the most direct impact on the container shipping market. Every year, about 30% of shipping vessels pass through this sea area to Europe; the impact of oil transport/dry distribution is relatively weak. Every year, about 11%/4% of global crude oil tankers/bulk carriers enter SUEZ through the Red Sea. On the other hand, considering the current seasonal low season, the impact of the Red Sea incident on short-term oil transport/dry bulk freight rates is limited.

As of January 1, the crude oil BDTI/refined oil BCTI/dry dispersion BDI tariff index performed +2%/+15%/-34% compared to December 1. If the situation continues, it will cause oil transports/dry bulk carriers to detour, driving up freight rates.

Medium to long term: Shipping faces greater pressure to deliver new ships; oil transport/dry distribution supply is tightening, supporting the freight rate center

In the medium to long term, the shipping market faced a large number of new ship deliveries in 24-25, a sharp increase in industry supply, or suppression of freight rate performance. According to Alphaliner data, the supply of ships in the global shipping market increased by 9.3%/4.9% in 24/25 (assuming a ship scrapping rate of 1.5%/1.4%) vs. demand grew by 2.2%/3.0% year on year, and oversupply pressure was high.

Orders for new oil transport/dry scattering vessels are at a historically low level, and industry supply is tightening. According to Clarksons data, in 24/25, global crude oil tanker supply (not considering ship scrapping) increased 0.8%/1.3% year over year vs demand increased 4.9%/2.4%; dry bulk supply (without considering ship scrapping) increased 3.2%/3.8% year over year vs demand increased 1.8%/1.6% year over year.

Risk warning:

1) Geopolitical risks; 2) Freight rates are lower than expected; 3) Ship supply is higher than expected.