, Beijing, September 23. In 2021, pig raising is not so profitable. Which business is more profitable?

The shipping industry is undoubtedly one of them.

A port in Ningbo, Zhejiang.

Photo by Zhou Weiqiang

Shipping has turned over, and the stock price has risen

  As of September 22, since August, the average increase of A-share shipping concept stocks has exceeded 26%.

Among them, COSCO Shipping Development, China Merchants Shipping, and COSCO Shipping have increased by more than 40% during the period; Changhang Phoenix and Strait shares have increased by more than 30%; Hong Kong shipping stocks have also risen to varying degrees.

  Behind the continued strength of A-share and H-share shipping concept stocks is the surge in international shipping freight rates.

  On September 21, the Baltic Dry Bulk Index (BDI) index rose 2.5% to 4,410 points, the highest level since November 2009.

Shipping prices of different types of ships have risen. For example, the Capesize freight index rose 4.6% to 785 points, a 12-year high; average daily profit increased by US$2,474 to US$56,269.

Baltic BDI Index.

Screenshot from Oriental Fortune website

  The increase in freight rates has brought huge profits to shipping companies.

  For example, COSCO SHIPPING Holdings achieved operating income of 139.264 billion yuan in the first half of the year, a year-on-year increase of 88.06%; net profit was 37.098 billion yuan, a year-on-year increase of 3162.31%.

The total operating income of China Grain Stream in the first half of the year was 5.604 billion yuan, a year-on-year increase of 26.23%; net profit was 1.1 billion yuan, a year-on-year increase of 342.9%.

  Since the beginning of 2021, the cumulative increase in the stock prices of COSCO SHIPPING Holdings and China Cereals Logistics has more than doubled.

In addition, the cumulative increase of COSCO Haite and COSCO Haifa exceeded 70%.

"One box is hard to find", the freight is doubled

  According to statistics from the Export Trade Section of the Bureau of Commerce of Yiwu City, Zhejiang Province, the price of ocean freight for containers exported from Ningbo Port has risen rapidly.

  Among them, the freight price of the West America route in August 2020 is 4,400 US dollars/container, and in August 2021, it has risen to 18,000 US dollars/container, which is a four-fold increase; while the freight price of Latin American routes before June 2020 is 1,200- US$1,300/container, which has doubled 10 times in August 2021, rising to US$14,000/container.

  "The new crown epidemic has reduced the transportation efficiency of the entire shipping market." The staff of a shipping company reported that due to the repeated effects of the epidemic, the waiting time for some ports in the city has been greatly extended, reaching more than 30 hours.

The contradiction between supply and demand has promoted the increase in freight rates.

A port in Ningbo.

Photo by Qiu Wenxiong

  Since the industrial chains and supply chains of many countries in the world have been greatly impacted by the epidemic, and the epidemic in China has been effectively controlled, the industrial chain and supply chain have been very well protected, which has greatly increased China's import and export trade demand.

  In the first half of 2021, China's import and export scale reached the best level in the same period in history.

The total value of import and export of goods was 18,065.1 billion yuan, a year-on-year increase of 27.1%.

Among them, exports were 9,849.3 billion yuan, a year-on-year increase of 28.1%; imports were 8,215.7 billion yuan, a year-on-year increase of 25.9%.

In August, the total value of China's imports and exports of goods was 3,429.3 billion yuan, a year-on-year increase of 18.9% and an acceleration of 7.4 percentage points from July.

  Since last year, European and American ports have been affected by the epidemic, resulting in a slower return of empty containers, resulting in a regional structural shortage of containers.

  Zhao Chongjiu, Deputy Minister of Transport, said at a press conference in June, “Global shipping, especially container transportation, with a capacity of 23 million TEUs, now except for about 1% of ships being repaired, is all devoted to shipping, even Some general cargo ships come to carry containers."

Data map: Qingdao Port Automation Wharf of Shandong Port carries out unloading operations on the ship "Mediterranean Martina".

Photo by Zhang Jingang

Sea freight prices will rise and rise?

  According to media reports, during the peak season for exporting Christmas products overseas in August and September, the problem of "cannot pay for the shipping of containers, even if they can afford it, can't order the containers" has caused headaches for many Yiwu vendors.

  "Every day I suffer from logistics." Li Yongkai, general manager of Qiaoshan Fitness Equipment (Shanghai) Co., Ltd., said recently that the company's sales were very good during this period, but the current rising sea logistics has become a challenge for corporate development.

The company's monthly freight only to US West Coast ports is 50 million yuan more than in the past. At the same time, the price has risen, and the logistics have been slower than in the past by 3 to 4 weeks.

  The good news is that since September, many shipping companies have successively announced that they will suspend spot freight increases. More than half of the world's top 10 shipping companies have followed up with the policy of "no increase in freight rates".

  Industrial Securities believes that before the overseas epidemic is effectively controlled, in the short term, the current demand for container shipping is still strong. The repeated epidemics have always restricted effective supply, and freight rates have continued to rise at high levels.

  Previously, Zhao Chongjiu said that the Ministry of Transport will continue to implement measures to stabilize foreign trade with the Ministry of Commerce and other departments, guide international liner companies to continue to increase the supply of shipping capacity on mainland China’s export routes, and at the same time improve the turnover efficiency of containers, “cooperating with the market supervision department to strengthen Supervision of charges at sea ports, investigation and punishment of illegal charges in accordance with the law".