Shares in China’s shipping sector continued their remarkable rally on Monday, with several major firms hitting their daily trading limits for a fifth consecutive day. This sustained surge is directly linked to the burgeoning demand for shipping services following the recent U.S.-China trade talks in Geneva, which resulted in a significant, albeit temporary, reduction in tariffs, reports the Manila Times.
Accelerated Activity
Shares of several Chinese port companies, including Jiangsu Lianyungang Port Co., Ningbo Marine Co., and Nanjing Port Co., experienced significant surges, all rising by their daily limit for a fifth consecutive day. Additionally, Zhuhai Port Co. and Ningbo Zhoushan Port Co. saw their shares jump by over 10%, also hitting their limit-up thresholds.
According to Zhao Nan, an expert at the Shanghai International Shipping Research Center, this rally in shipping-related stocks reflects increased purchasing activity by US companies. This surge is a direct consequence of the recent China-US trade talks, which concluded a week prior, and the subsequent 90-day tariff suspension window. US companies are reportedly rushing to stockpile goods to take advantage of this temporary reduction in tariffs.
Industry experts also point to the uncertainty surrounding the situation after the 90-day tariff suspension as another key factor driving this rush. Companies are aiming to ship goods to the US now to avoid potential future costs or disruptions that could arise once the suspension ends.
This accelerated shipping activity is occurring earlier than the traditional peak season for China-US trade, which typically runs from July to September. This period usually sees businesses preparing for major US shopping events in the second half of the year, such as Thanksgiving, Black Friday, and Christmas. The current surge suggests an early start to what is usually a busy shipping period.
Higher Freight Volumes
An analyst at Huayuan Securities noted that this surge in shipments is a direct consequence of the tariff pause. This sentiment is echoed by Yao Shuai of Shipco Transport (Shanghai) Shenzhen Branch, who highlights the eagerness of US clients to receive goods swiftly. This urgency is driven by a desire to compensate for delays incurred during the period of high tariffs preceding the joint China-US statement. Before the tariff truce, Shipco Transport’s shipments from China to the US had plummeted by approximately 70%, and the frequency of vessels, container availability, and air freight capacity also saw substantial drops of 60-70% as carriers reduced services due to underutilized capacity.
However, with the tariff pause in effect, Yao anticipates that in the coming weeks, shipping routes from China to the US will become congested with cargo, leading to higher freight volumes and a significant increase in shipping costs. He also noted that outbound shipments are currently awaiting the arrival of ships at Chinese ports.
Major shipping lines are already observing this rebound. A representative from Maersk confirmed an “increase in cargo bookings” following the significant reduction in China-US tariffs. In response, Maersk plans to increase capacity on the China-US route to meet this rebounding market demand. This acceleration of shipping activity is occurring earlier than the traditional peak season for China-US trade, which typically runs from July to September.
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Source: The Manila Times
