In recent times, the difficulty of investing in the stock market has increased, especially the new energy track that has risen sharply in the past two years has fallen into a period of low tide. The continuous declines have gradually made investors numb.
The east side is not bright, the west side is bright. The new energy track is no longer possible, and the old energy track performs "only here". The stock prices of coal and oil industry chains have all experienced a magnificent trend this year. The coal sector index has increased by more than 50% this year, and the shipping sector index has also increased by 50%.
In particular, oil transportation stocks rose the largest , and the leaders COSCO Shipping (600026.sh) and China Merchants Nanyang Oil Corporation (601975.sh) have led the growth.
against the trend cycle big bull stocks
Since the end of last year, A shares Shanghai Composite Index has fallen from more than 3700 points to around 3000 points now, and ChiNext Index has fallen from more than 3500 points to around 2300 points now, which shows how difficult it is to make money by investing in A-shares this year. However, the more difficult the is in such a difficult situation, the more you can see the explosive power of cyclical stocks!
htmlWhen the market speculated about the European energy crisis in August, COSCO Hide (600428.sh), which had been engaged in special marine transportation in just 13 trading days, pulled from 4.5 yuan to 10.34 yuan, hitting the daily limit in 5 days, and soaring by more than 100% in the short term.
In fact, the market's hype for COSCO Ship is just the tip of the iceberg and is a concentrated reaction to the European energy crisis. The real big bull stocks hidden behind it are COSCO Ship, China Merchants South Oil and China Merchants Steamship (601872.sh).
COSCO Shipping is China's largest oil transportation enterprise, mainly transporting goods in oil and coal; China Merchants South Oil is mainly engaged in the transportation of offshore oil, refined oil, chemical products and gases; China Merchants Steel Shipping is mainly engaged in international crude oil, international and domestic dry bulk cargo, domestic roll-on and roll-off and other maritime transportation businesses.
htmlIn one year, the stock price of COSCO Shipping has doubled, with the largest increase of 324%, with the latest market value of 89.21 billion; the stock price of China Merchants Nanyou has increased by 1.7 times, with the largest increase of 238%, with the latest market value of 26.35 billion; the stock price of China Merchants Shipping has increased by nearly doubled, with the largest increase of 141%, with the latest market value of 63.13 billion.
(screenshot of China COSCO Shipping stock price trend)
(screenshot of China Merchants Nanyou stock price trend)
(screenshot of China Merchants Shipping stock price trend)
can be seen how strong these three major oil transportation stocks in the A-share market are this year. In fact, in addition to these three major oil transport stocks, the biggest increase in shipbuilding China Shipbuilding (600150.sh) has also doubled the year's biggest increase.
logic is not difficult to understand. If the increase in demand for offshore oil transportation is the reason for the outbreak of oil transportation stocks this year, then with the increase in demand for tankers, the demand for ship repair and new construction will also increase, thereby driving shipments from shipyards.
The prosperity continues to rise, freight rates soaring
It may still be the "myth" that everyone remembers about shipping stocks. China COSCO Shipping (601919.sh) soared 15 times in a year, and its performance of earning 15 billion yuan in the first quarter of 2021. The "Davis Double Click" of performance and valuation has made China COSCO Shipping soaring stock price.
is different from COSCO Ocean Energy, China Merchants Nanyang Oil and China Merchants Steel. COSCO Ocean Control is mainly engaged in global offshore container transportation business. The reason behind its performance and stock price explosion is that from the second quarter of 2020 to the first half of 2021, global offshore capacity is tight , and the demand for offshore containers explodes, and it is difficult to find a box, representing the level of maritime freight rates, the Baltic dry bulk index soared from the low of 394 points to the high of 5650 points.
(screenshot of the Baltic dry bulk index)
Recently, the Baltic dry bulk index has risen to a certain extent, but the stock price of COSCO Shipping has continued to fall. Why is this?
First of all, from the freight index , although the freight index has risen recently, the increase is far less than that of the second quarter of 2020 to the first half of 2021; secondly, the growth in the demand for offshore oil transportation in the past month has also driven the rise of the freight index, but the biggest increase is the super-large tanker freight rate!
tanker is divided into four types according to ship type: super large (VLCC), Suez type, Alfra type, and Panama type . Among them, VLCC is the main ship type of long-distance tanker, accounting for 60% of crude oil capacity, with a load capacity of between 200,000 and 300,000 tons, which is equivalent to the load capacity of 2 million barrels of crude oil.
With the arrival of the peak season in the winter oil transportation, coupled with the Russian oil embargo, VLCC freight rates have continued to soar in the past month. data shows that at the beginning of August this year, the average daily rent of VLCC was still at the level of US$15,000 per day. So far, the average daily rent of VLCC has increased to US$70,000 per day, and the VLCC freight rate has increased by more than 3 times in just one and a half months!
(Source: CITIC Securities Research Report)
This can explain why the stock prices of COSCO Shipping, China Merchants Nanyang Oil and China Merchants Steel continue to rise, while COSCO Shipping’s stock price continues to fall. According to relevant information, COSCO Shipeng has the world's number of tankers , with 49 VLCC types, 11 VLCC types leased, 5 Suez types, and 9 Alfra types; Buyer ship has the world's number of tankers , with 51 VLCC types and 5 Alfra types.
European energy crisis broke out, low oil prices and strong demand
A fundamental logic that the strengthening of A-share oil stocks is that the Russian-Ukrainian conflict, Europe and the United States impose sanctions on Russia, Russian oil embargo and the indefinite closure of "North Stream No. 1" has caused a surge in energy prices in Europe. In addition, the peak winter season is coming, making Europe eager to seek energy supply outside Russia, thereby increasing the shipping demand for Middle East and North America.
(Source: CITIC Securities Research Report)
It can be seen that the main routes of international crude oil are the Middle East- Far East , Middle East-US Gulf/Europe, West Africa -Far East, US Gulf-US Far East, Now because of Europe's sanctions on Russia and Russia, Russia refuse to supply gas to Europe, so Europe can only import crude oil from several major oil-producing regions of West Africa, the US Gulf and the Middle East. This not only increases the demand for oil transportation, but also extends the transportation distance. Of course, the oil transportation company is the most beneficial.
On the other hand, the current continuous decline in crude oil prices is also a major reason for the growth of oil transportation demand. As of now, the price of Brent crude oil is about 88 US dollars per barrel and US oil is about 82 US dollars per barrel. The price of oil has fallen by more than 35% from its high at the beginning of the year, increasing the demand for replenishing inventory .
( Brent oil price trend screenshot)
In addition, since June this year, OPEC has changed its production cut plan that has lasted for two years. It increased production in July, August and September for three consecutive months. OPEC's continuous increase in production puts certain pressure on oil prices . The low oil price may continue for a while, which will stimulate Europe to step up its purchase of oil from the US Gulf, the Middle East, West Africa and other places.
To sum up, there is actually support from specific backgrounds behind each round of cyclical stock outbreak. After the second quarter of 2020, countries have successively experienced container "hard to find a box". Maritime freight prices continue to soar, and the global container leader China COSCO Shipping Control benefited.This year, with the Russian-Ukrainian conflict, the European energy crisis and the continued decline in oil prices, the market demand for VLCC tankers has risen sharply, and global oil transport leader COSCO Shipping and VLCC leader China Merchants Shipping have benefited.
