[Featured Stock] HMM Surges... Impact of Rising Freight Rates Due to China's Volume Push-Out

Global Maritime Freight Index Hits Post-COVID High
Exports Surge Ahead of US Tariff Hike, Freight Costs Soar
Ongoing Israel-Palestine Tensions Raise Concerns Over Hormuz Strait Blockade

HMM, the only domestic national shipping company, is showing strength. This appears to be influenced by prolonged tensions in the Middle East and the recent surge in freight rates due to China's 'push-out' shipments ahead of the US-imposed 'tariff bomb.'

As of 9:33 AM on the 3rd, HMM is trading at 19,340 KRW, up 7.44% from the previous session. Other shipping-related stocks are also generally on the rise. Heung-A Shipping (9.74%), STX Greenlogis (4.47%), Pan Ocean (4.18%), KSS Shipping (2.16%), and Korea Line Corporation (0.20%) are all increasing.

According to the shipping industry, on the 31st of last month, the Shanghai Containerized Freight Index (SCFI), a global maritime freight indicator, surpassed 3000 for the first time since the COVID-19 pandemic. Freight rates rose by more than 50% in May alone. This is because Chinese companies engaged in 'push-out exports' ahead of the US 'tariff bomb.' Starting in August, the US plans to raise tariffs on Chinese electric vehicles, semiconductors, medical supplies, and solar panels, which currently stand around 25%, to as high as 100%. Since the new policy will reduce price competitiveness, Chinese companies are flooding the market with shipments.

Furthermore, freight rates show no signs of declining as tensions between Israel and Palestine continue to prolong. There are forecasts that shipping rates could rise further due to Iran's blockade of the Strait of Hormuz, and combined with China's 'push-out exports,' domestic export companies are facing difficulties. On the other hand, this is a strong positive factor for shipping companies operating container ships and others.

Choi Go-woon, a researcher at Korea Investment & Securities, stated, "Although uncertainty related to the largest shareholder is hindering an appropriate valuation of cash assets, so we are not presenting a target price, HMM is currently the stock to watch most closely in the transportation sector." He added, "The current strength of the container market is at a level incomparable to the pandemic logistics crisis, and the leadership in the shipping market has shifted to the shipping companies."

This content was produced with the assistance of AI translation services.