HK Stock Concept Tracker | VLCC Rates Hit Record Highs: How Much Longer Can the Tanker Market's "Frenzy" Last? (With Concept Stocks)

Oil shipping rates continue to hit historic extremes. As of October 8, the TCE on the VLCC Middle East-to-China TD3C route reached $1.4126 million per day, up 15.6% week-on-week; the West Africa-to-China route stood at $763,000 per day, surging 48.1% week-on-week. Research institutions noted that high cracking spreads are driving refinery import demand, and the upward trend in the freight rate center is clear. The oil shipping boom is moving toward "longer and wider," with supply-side capacity efficiency losses irreversible and demand-side high cracking spreads continuing to support arbitrage demand. In the secondary market, on October 8, the first trading day after the National Day holiday, the three major A-share oil shipping names surged at the open. Behind the continued rally in oil shipping stocks is an unsettled external environment. Since late July, with the resurgence of US-Iran tensions and worrying prospects for the reopening of the Strait of Hormuz, the oil shipping boom has entered a new phase. Continuous release of upstream cargo volumes, reduced midstream capacity efficiency, and downstream "scrambling for oil and ships" have resonated across all three segments, jointly supporting the oil shipping boom at sustained highs, or even further upside. During the National Day A-share market closure, the oil shipping tightness further intensified. Saudi Arabia restarted the East-West Pipeline and has issued October loading schedules to customers, with crude oil loadings at Yanbu port beginning to recover; congestion in the Gulf of Oman has forced VLCCs to relocate to the Kutch Bay on India's west coast for STS transfer operations, lengthening voyage distances; Middle East export recovery and high freight rates have tightened Atlantic China Welding Consumables, Inc. VLCC capacity, prompting charterers to scramble for Suezmax tankers, with Suezmax freight rates jumping. These events all reflect the recovery of Middle East crude oil exports and irreversible efficiency losses. The tightness in oil shipping is directly reflected in freight rates. The China Import Crude Oil Freight Index (CTFI) for the Ras Tanura in the Persian Gulf to Ningbo, China route (vessel type: VLCC; cargo volume: 265,000 MT) has risen more than 19-fold year-to-date as of September 30, with a gain of 285.54% in the second half of the year; the Baltic Dirty Tanker Index (BDTI) also rose nearly 5-fold year-to-date as of October 7. Meanwhile, transshipment patterns are dragging down transport efficiency. Freight analyst Georgios Sakellariou stated that ship-to-ship transfer operations around the Strait of Hormuz are inefficient, continuously consuming vessel capacity. A VLCC completing a one-way voyage from the Persian Gulf to East Asia takes about three weeks, and the transshipment segment further weakens actual deployable capacity. Additionally, the probability of an El Nio event reaching super-strong levels from October to December 2026 is as high as 81%, putting the Panama Canal's transit efficiency under severe strain, with longer voyage distances pushing up industry costs. Brokerage research suggests that whether under the post-Hormuz new normal of a "Middle East capacity black hole," or after a complete recovery of Middle East crude oil exports following the end of US-Iran conflict, VLCC capacity is expected to remain in "a ship is hard to find" territory, and the sustainability of the oil shipping boom could exceed expectations. Guotai Haitong pointed out that VLCC freight rates have hit new historic highs, with the ultra-boom significantly transmitting to smaller vessels. Since September, the Hormuz dark fleet passage has been opened up, Middle East crude oil exports have continued to recover, and tanker operating efficiency has declined, driving oil shipping freight rates to surge repeatedly to historic highs. Last week, VLCC freight rates jumped again to new highs, with TCE on the Middle East-Oman route rising to $910,000 per day, and TCE on the US Gulf and West Africa routes surging to $630,000-$760,000 per day. Related concept stocks: COSCO SHIPPING Energy Transportation (01138): JPMorgan recently noted that under a base-case scenario assuming average VLCC daily time charter rates of $135,000 and $100,000 for 2026 and 2027 respectively, far below spot levels. Under the 2027 base case of $100,000 per day, COSCO SHIPPING Energy Transportation's H-share and A-share P/E ratios are approximately 11x and 14x respectively; if the average daily time charter rate is $178,000, the multiples would drop to approximately 6x and 7x, indicating significant upside potential for earnings. Container shipping sector Hong Kong stocks involved: COSCO Shipping Holdings (01919); OOIL (00316); SITC (01308), etc. JPMorgan recently released a research report stating that the latest Q3 2026 data continues to show short-term demand better than market concerns, with operational frictions still providing meaningful support to utilization and yield. The bank maintains an overweight stance on the Asian shipping and port sector. The bank noted that the September Logistics Manager's Index (LMI) re-accelerated to 70.2, up 3.6 points month-on-month, with transport prices remaining elevated and transport capacity contracting for the tenth consecutive month, consistent with late-cycle restocking impulses; US imports also remained firm, with the Port of Los Angeles recording its busiest three months ever from June to August. Global port congestion has risen to approximately 13% of the fleet (about 8% in April), and the industry continues to reflect bottlenecks at Asian ports due to concentrated vessel arrivals and typhoons, weakening schedule reliability and absorbing effective capacity. Panama Canal slots and draft conditions have improved somewhat, but last weekend's earthquake reminded that the operating environment can change rapidly; canal authorities currently indicate operations are unaffected, though risks remain skewed to the downside if conditions deteriorate. The bank believes that despite lingering medium-term supply risks, congestion and demand resilience are translating into stronger pricing power and profit margins. On the port side, CHINA MER PORT (00144) is seen as a beneficiary of sustained or even locally worsening congestion, rated "Overweight." On the Asian liner side, the bank maintains a constructive view and "Overweight" ratings on SITC (01308), COSCO Shipping Holdings (01919), Evergreen Marine (2603.TW), OOIL (00316), Mitsui O.S.K. Lines (9104.JP), and TS LINES (02510), believing their business mix, regional exposure, and execution capabilities help capture the current freight rate environment.