Huachuang Securities has released a research report expressing a fully bullish stance on shipping investment opportunities. The firm identifies three key demand drivers in the tanker market, including restocking demand, the shift of Iranian oil to compliant markets, and inventory expansion alongside import diversification. On the supply side, the retirement of aging vessels is expected to offset newbuild deliveries, while the aggressive VLCC purchasing activity by Champion Shipping represents a notable structural shift in the market landscape.

In the dry bulk segment, supply growth remains constrained, with the orderbook for bulk carriers standing at approximately 14% of the fleet 鈥?the lowest among the three major shipping sectors. Demand-side catalysts include the Simandou mine ramp-up, which extends sailing distances, while potential El Ni帽o weather patterns later this year could provide further support to peak-season freight rates. For the container shipping sector, the firm expects supply-demand dynamics to maintain a tight balance throughout the year, with the July-August peak season combined with front-loading activity driving an acceleration in the CCFI. Ongoing port congestion continues to create disruptions, and Huachuang anticipates accelerated earnings growth for container shipping companies in the second half, supported by attractive dividend yields.

Tanker Market: Freight Rates Reach Historic Highs, Record Q2 Earnings for China Merchants and COSCO Shipping Energy

Market review: Since the start of this year, the tanker market has operated against a backdrop of tight supply-demand fundamentals. Industry consolidation, increased demand from compliant markets, and unexpected geopolitical events have driven freight rates sharply higher to historically elevated levels. In the first half of 2026, average freight rates for VLCCs on the US Gulf and West Africa routes reached $106,000 and $113,000 per day respectively, representing year-on-year increases of 184% and 204%. Rates for smaller crude tankers and product tankers also rose in tandem.

Earnings performance: For H1 2026, net profits attributable to shareholders were as follows: China Merchants Energy Shipping recorded RMB 6.96 billion, up 228% year-on-year; COSCO Shipping Energy Transportation posted RMB 4.54 billion, up 143%; and Nanjing Tanker Corporation achieved RMB 810 million, up 42.4%. In Q2 2026 specifically, China Merchants Energy Shipping reported net profit of RMB 4.2 billion, up 233% year-on-year and 51.8% quarter-on-quarter; COSCO Shipping Energy Transportation delivered RMB 2.37 billion, up 104% year-on-year and 9.1% sequentially; and Nanjing Tanker posted RMB 380 million, up 33.1% year-on-year but down 12% sequentially. Due to robust freight rate performance, all three tanker companies achieved significant year-on-year earnings growth in the first half. In Q2 2026, China Merchants Energy Shipping and COSCO Shipping Energy Transportation both set new record highs for quarterly net profits. China Merchants Energy Shipping delivered the most outstanding tanker business results, while COSCO Shipping Energy Transportation was weighed down by eight vessels stranded in the Gulf region. Nanjing Tanker saw relatively softer earnings growth compared to the other two, as MR freight rate increases on eastern routes lagged behind VLCC gains.

Dry Bulk: Cyclical Upswing Exceeds Expectations, Driving Strong Earnings Growth

Market review: The average BDI for H1 2026 stood at 2,347 points, up 82% year-on-year. In Q2 2026, the average BDI reached 2,751 points, representing an 87% increase year-on-year and a 41% rise quarter-on-quarter. The BDI accelerated its upward trajectory from April onwards, breaking through the 3,000-point level in May. On the cargo side, iron ore shipments were supported by demand on long-haul routes, coal transport demand was bolstered by geopolitical factors, and bauxite and grain cargoes also delivered impressive performance.

Earnings performance: In H1 2026, Pacific Basin Shipping recorded net profit of $110 million, up 310% year-on-year; Haitong Development achieved net profit attributable to shareholders of RMB 520 million, up 503%; and China Merchants Energy Shipping's dry bulk division posted net profit of RMB 1.18 billion, up 179%. For Q2 2026, Haitong Development reported net profit of RMB 310 million, up 1,528% year-on-year and 49% sequentially, while China Merchants Energy Shipping's dry bulk business delivered RMB 750 million, up 184% year-on-year and 72% quarter-on-quarter.

Container Shipping: Rates Transition from Weak to Strong, Marked Q2 Earnings Improvement

Market review: The container shipping market exhibited a trajectory from weakness to strength during the first half. Freight rates were relatively subdued during the early-year off-season, but following the Middle East conflict in March, rerouting and supply chain uncertainty re-elevated the risk premium on freight rates. In May, tariff policy adjustments and peak-season front-loading triggered synchronized rate increases across multiple global routes. The average CCFI for H1 2026 was 1,240 points, down 1.3% year-on-year, while the Q2 average reached 1,350 points, up 16.2% year-on-year and 19% quarter-on-quarter.

Earnings performance: For H1 2026, net profits attributable to shareholders were as follows: COSCO Shipping Holdings recorded RMB 13.4 billion, down 23.5% year-on-year; Jinjiang Shipping posted RMB 750 million, down 5.4%; Zhonggu Logistics achieved RMB 1.08 billion, up 1.05%; and China Merchants Energy Shipping's container division delivered RMB 580 million, down 7.6%. SITC International reported $680 million, up 7.4%, while TS Lines posted $230 million, up 23.3%. In Q2 2026: COSCO Shipping Holdings recorded RMB 7.54 billion, up 29% year-on-year and 28% sequentially; Jinjiang Shipping posted RMB 420 million, down 5% year-on-year but up 24% quarter-on-quarter; Zhonggu Logistics achieved RMB 560 million, up 5.9% year-on-year and 5.5% sequentially; and China Merchants Energy Shipping's container segment delivered RMB 330 million, up 12% year-on-year and 30% quarter-on-quarter. Consistent with freight rate trends, TS Lines and Zhonggu Logistics, which have positioned themselves on Middle East/Red Sea routes, posted more impressive growth rates. Jinjiang Shipping, operating primarily in the intra-Asia regional market where Q2 rate increases were softer than on mainline routes, saw its earnings growth lag behind COSCO Shipping Holdings. SITC International continued to deliver steady growth through its superior route network, operational efficiency, and cost control capabilities.

Risk warnings: Sharp declines in spot freight rates, weaker-than-expected demand, and the impact of geopolitical events.