Is the oil transportation market expected to start a new boom cycle?

- Feb 20, 2020-

On October 11, China Merchants shipping (601872) shares closed at 6.4 yuan / share, rising and falling for two consecutive days. COSCO Haineng (600026), another oil transport target of a share, was no inferior and closed up. On the previous trading day, COSCO Haineng also rose 7.44%.            

It is worth mentioning that, on September 26, COSCO was able to suspend trading as a result of verifying major issues. Subsequently, the company confirmed that the wholly-owned subsidiary Dalian COSCO marine oil transportation Co., Ltd. has been listed in the list of specially designated nationals and prohibited persons by the overseas assets control office of the US Treasury Department.            

The sanctions imposed by the US Treasury Department did not have a continuous impact on the A-share oil transportation sector. On the day of suspension of COSCO energy, the stock price of China Merchants ship was disturbed, but it rose rapidly in the next few trading days. In addition, after the resumption of trading, COSCO energy has stabilized and risen even though it fell for two consecutive trading days.            

In view of the sharp rise in the oil transportation sector, some researchers believe that the logic of "national cargo transportation, national shipbuilding and independent control" will be further strengthened; of course, many institutions are optimistic about the recovery of the fundamentals of the oil transportation sector. On the one hand, the oil transportation price is about to enter the rising channel, on the other hand, the supply and demand structure of the tanker transportation capacity will start to improve.