Hong Kong's shipping stocks have diverged amid contrasting institutional moves. Customs data reveals China's robust trade performance: H1 2025 imports/exports hit ¥21.79 trillion (+2.9% YoY), with exports surging 7.2% to ¥13 trillion. Quarterly momentum accelerated to 4.5% growth in Q2, extending a seven-quarter expansion streak. June shipments alone reached ¥3.85 trillion (+5.2% YoY), reflecting resilient demand that propelled shipping stocks since April.
Shares of COSCO SHIPPING Holdings (01919.HK), SITC International (01308.HK), and T.S. Lines (02510.HK) soared 35.4%, 82.9%, and 233% respectively from April lows. Pacific Basin (02343.HK) and Orient Overseas (00316.HK) similarly rallied. Yet sector momentum stalled in June as new U.S. tariffs targeting over 20 nations ignited volatility. On July 8, shipping stocks including SITC International plunged amid trade policy uncertainty.
Southbound capital emerged as a stabilizing force during the turbulence. Between May 22 and July 11, mainland investors boosted their stake in COSCO SHIPPING Holdings from 29.81% to 34.68%. Similarly, positions in COSCO SHIPPING Energy (01138.HK) and Pacific Basin climbed to 61.73% and 7.14%. SITC International and Orient Overseas also saw steady accumulation since late May.
Countering this bullish stance, HSBC and Citibank executed massive sell-offs. HSBC's Hong Kong desk offloaded 12.09 million shares of COSCO SHIPPING Holdings in ten sessions through July 11, while Citibank dumped 9.04 million shares. Earlier, a staggering HK$755 million position transfer from Southbound channels to HSBC occurred on May 14. COSCO SHIPPING Energy witnessed similar maneuvers: a HK$437 million transfer between HSBC and Citibank on June 3, followed by combined sales exceeding 73 million shares. Such substantial transfers signal institutional divergence over sector prospects, potentially amplifying short-term volatility.
Fundamentals, however, suggest enduring strength. The China Shipping Prosperity Index jumped to 120.81 points in Q2 2025, entering "strong prosperity" territory. CITIC Futures notes container rates may hit $3,400/FEU by mid-July, with August hikes likely amid robust European demand and port congestion. Belt and Road trade flows grew 4.7% to ¥11.29 trillion in H1, with ASEAN trade up 9.6%, underpinning long-term demand.
Supply-side discipline prevails as major carriers optimize fleet deployment, slowing global container capacity growth. Industry consolidation enhances pricing power while digitalization and green initiatives—spurred by IMO emissions rules—bolster efficiency. Despite near-term tariff-induced fluctuations, the convergence of favorable demand-supply dynamics, policy tailwinds, and technological upgrades positions shipping stocks for renewed upside. Investors should monitor capital flows and industry developments to navigate potential opportunities.