According to Xinhua News Agency, the meeting of heads of state of China and the United States at the G20 meeting, the two sides agreed to restart economic and trade consultations on the basis of equality and mutual respect, and the US will no longer impose new tariffs on Chinese products; China will increase imports of agricultural products from the United States ( According to the White House press release). The economic and trade teams of the two countries will discuss specific issues. In addition, China indicated that it will further open its market: six new free trade pilot zones will be set up, a new zone of the Shanghai Free Trade Zone will be added, and the process of building a free trade port in Hainan will be accelerated.
Improve market sentiment and directly benefit shipping demand
We believe that the resumption of trade negotiations between China and the United States will enhance market sentiment, especially the shipping and port sectors, directly benefiting from the easing of Sino-US trade frictions, and the more substantial impact will depend on the outcome of the follow-up negotiations and implementation.
Dry bulk
China's imports of agricultural products from the United States are good for small bulk goods: Before the trade friction occurred, China imported nearly 33 million tons of soybeans from the United States in 2017 (accounting for 7% of global food and sea shipments), and in 2018 it decreased by 49% year-on-year. Bean time is mainly concentrated from November to April of the following year, but considering the high domestic stocks in the United States, if a large number of imported US soybeans in the near future push the freight rate up, it will bring investment opportunities. This year's fourth quarter peak season is more worth looking forward to.
container
In the case of speeding up shipments and shipowners' control of capacity in the near future, the freight rate of the US West Line increased by 24.5% from the previous month, and no new tariffs will be imposed. It may reduce the centralized shipment caused by the rush, and the short-term freight rate may fall slightly. Considering the gradual entry into the peak season of the third quarter, coupled with the easing of trade frictions, it will help improve global economic growth expectations and container transportation demand, and pay attention to the peak season. However, it is necessary to pay attention to the shipowner's capacity. As the industry concentration increases, this year the shipowners take the initiative. Control the capacity to cope with the possible volume reduction (therefore the US contract price rises by about 20%), and if it becomes optimistic about the market outlook, it will test the market structure.
Oil transportation
Sino-US trade is expected to add icing on the cake. Since October last year, China’s crude oil imports from the United States have fallen sharply and even stagnated in individual months. The US exports have reached new highs with the increase in production and infrastructure capacity, and exports to India, Japan, South Korea, and Taiwan have grown substantially. If China and the United States can reach an agreement in the future and include trade in crude oil and LNG, the long route will greatly benefit the demand for oil transportation turnover.
Expanding open policies brings trading opportunities
As a sector directly related to trade and openness, transportation is often driven by policy-driven policies. The impact on profitability depends on the strength and implementation of the policy.
Six new free trade pilot zones have been set up: From the geographical point of view, the coastal provinces of Hebei, Shandong, Jiangsu, and Guangxi have not yet been approved for free trade zones, while the central provinces of Hunan, Anhui, and Heilongjiang provinces in the northeast are actively reporting. The relevant targets are expected to benefit.
Adding a new area of Shanghai Free Trade Zone: According to the speech of the Shanghai leadership, the new area is mainly located in the Lingang area, which is beneficial to Shanghai's local ports, transportation and logistics stocks, depending on the implementation of the policy.
Exploring the construction of Hainan Free Trade Port: To a certain extent, it is beneficial to companies engaged in Hainan's local transportation and logistics business.