The outlook for Taiwanese dry bulk shippers will likely brighten due to Chinese steel mills’ iron ore restocking and improving industry fundamentals, Yuanta Securities Corp (元大證券) said yesterday.
Of the companies in the local dry bulk shipping sector, the brokerage named U-Ming Marine Transport Corp (裕民航運), Chinese Maritime Transport Ltd (中國航運) and Sincere Navigation Corp (新興航運) as potential key beneficiaries of the restocking and industry improvements because of their big exposure in the capesize sector.
U-Ming shares rose 1.76 percent yesterday, as Chinese Maritime stock jumped 6.3 percent and Sincere Navigation moved up 2.13 percent on the Taiwan Stock Exchange, versus the broader market’s 0.49 percent fall.
The three companies focus mainly on shipping bulk raw materials, such as iron ore, coal, grains and cement.
“While the recent capesize freight rate recovery is mainly driven by China’s iron ore restocking, we also believe that the demand and supply balance is improving for the capesize segment, which should serve as a positive longer-term catalyst,” Yuanta analyst Yvonne Tsai (蔡昀真) said in a client note.
Sincere Navigation vice president Lee I-Jen (李義仁) told the Liberty Times (the Taipei Times’ sister paper) on Tuesday that the high season is likely to continue through December.
“Things appear to be very busy for capesize segment in the second half this year in view of Chinese steelmakers’ restocking demand,” Lee told the newspaper.
The Baltic Capesize Freight Rate Index has rebounded sharply this month and is now 40 percent higher than its peak level of the year and 120 percent higher than the average level seen between last year and the first half this year.
“The rebound is much stronger than that recorded by other segments, such as panamax and supermax,” Tsai said.
She also said the improving market dynamics in the capesize segment, where demand is likely to outpace capacity growth over the next two years, would generate a positive long-term growth.
Yuanta forecast that annual fleet capacity in the capesize segment is to slow to 5.7 percent next year from 8.7 percent this year and down from the 15 percent to 20 percent per annum seen in the past four years. It also expects growth in demand for shipping iron ore and other commodities would stay steady at between 6 percent and 7 percent next year.
The Baltic Dry Index, a measure of shipping costs for dry bulk commodities, surged more than 5 percent yesterday to its highest level since December 2011, according to the London-based Baltic Exchange.
ENERGY ISSUES: The TSIA urged the government to increase natural gas and helium reserves to reduce the impact of the Middle East war on semiconductor supply stability Chip testing and packaging service provider ASE Technology Holding Co (日月光投控) yesterday said it planned to invest more than NT$100 billion (US$3.15 billion) in building a new advanced chip testing facility in Kaohsiung to keep up with customer demand driven by the artificial intelligence (AI) boom. That would be included in the company’s capital expenditure budget next year, ASE said. There is also room to raise this year’s capital spending budget from a record-high US$7 billion estimated three months ago, it added. ASE would have six factories under construction this year, another record-breaking number, ASE chief operating officer Tien Wu
The EU and US are nearing an agreement to coordinate on producing and securing critical minerals, part of a push to break reliance on Chinese supplies. The potential deal would create incentives, such as minimum prices, that could advantage non-Chinese suppliers, according to a draft of an “action plan” seen by Bloomberg. The EU and US would also cooperate on standards, investments and joint projects, as well as coordinate on any supply disruptions by countries like China. The two sides are additionally seeking other “like-minded partners” to join a multicountry accord to help create these new critical mineral supply chains, which feed into
For weeks now, the global tech industry has been waiting for a major artificial intelligence (AI) launch from DeepSeek (深度求索), seen as a benchmark for China’s progress in the fast-moving field. More than a year has passed since the start-up put Chinese AI on the map in early last year with a low-cost chatbot that performed at a similar level to US rivals. However, despite reports and rumors about its imminent release, DeepSeek’s next-generation “V4” model is nowhere in sight. Speculation is also swirling over the geopolitical implications of which computer chips were chosen to train and power the new
TECH WINNERS: Taiwan and South Korea reported robust trade, which suggests that they have critical advantages in the rapidly expanding AI supply chain, an official said Exports last month surged to a new high, as booming demand tied to artificial intelligence (AI) infrastructure fueled shipments of advanced technology components, underscoring the nation’s pivotal role in the global semiconductor supply chain. Outbound shipments climbed to US$80.18 billion, the highest ever for a single month, rising 61.8 percent from a year earlier and marking the 29th consecutive month of growth, the Ministry of Finance said yesterday. “The surge was driven primarily by global investment in AI infrastructure,” Department of Statistics Director-General Beatrice Tsai (蔡美娜) said. The mass production of next-generation AI computing systems has accelerated procurement across the semiconductor supply
RSS