Resumed Hormuz transit drives a sharp surge in VLCC freight rates, while container volumes and the SCFI continue to strengthen

Overview

This report is UBS China Industrials' weekly shipping supply chain update, using UBS Evidence Lab, the Ministry of Transport, Clarksons, and other third-party data to track the latest trade flows, freight rates, and transit conditions in shipping, shipbuilding, and ports. Key topics in Week 25 include the resumption of transit through the Strait of Hormuz, the rapid rebound in VLCC earnings, continued gains in container throughput and main-lane freight rates, as well as changes in dry bulk and newbuilding prices.

Core views

The report argues that expectations for the reopening of Hormuz have driven a significant increase in VLCC spot earnings, indicating a clear short-term recovery in tanker-related fundamentals; container shipping demand continues to improve, with throughput at major Chinese ports and the SCFI both posting sequential and year-on-year growth, and Asia-to-U.S. routes showing strong year-on-year growth since May; the dry bulk market softened last week, but the BDI remains in a relatively strong range year to date, and Capesize earnings continued to rise sequentially; newbuilding prices remain elevated, with VLCC and gas carrier demand still supporting shipyard order books and the pricing environment.

Analysis framework

The report adopts a weekly high-frequency monitoring framework, combining AIS vessel positions, vessel characteristics, bills of lading, port throughput, Clarksons freight rates and vessel earnings, and indices such as SCFI/CCFI to observe vessel transit, cargo volumes, freight rates, and supply-demand changes across key trade corridors including Hormuz, the Red Sea, Asia-to-U.S., and Shanghai-to-Europe.

Methodology notes

• High-frequency shipping dataUBS Evidence Lab Global Maritime Destination Monitor

  Global maritime destination monitoring

  Uses hourly AIS data to track the positions of more than 35,200 commercial vessels, and combines IMO numbers, vessel type, size, capacity, and bill-of-lading data to calculate vessel counts and cargo flows passing through ports, regions, and routes.

• Fleet and trade flow monitoringUBS Evidence Lab Global Maritime Fleet Monitor / Global Maritime Trade Monitor

  Fleet and maritime trade flow monitoring

  Tracks the movement of tankers, dry bulk carriers, and container ships across global key regions, ports, and chokepoints using AIS, vessel characteristics, and deadweight tonnage data, while applying cleaning algorithms and benchmark checks to reduce AIS noise.

• Trade disruption monitoringUBS Evidence Lab Daily Maritime Trade Disruption Monitor

  Daily maritime trade disruption monitoring

  Uses hourly AIS data to observe vessel transits and tonnage changes at chokepoints, ports, and regions, in order to track the recovery or disruption of key corridors such as Hormuz.

• Industry freight indicatorsSCFI, CCFI, BDI, Clarksons

  Shipping freight and vessel earnings tracking

  Combines container freight indices, dry bulk indices, and Clarksons vessel earnings data to gauge freight-rate elasticity and cyclical momentum across vessel types and routes.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• VLCC/Tankers

  Directly affected by Hormuz transit, expectations for the reopening of the Persian Gulf, and demand on the Middle East-to-China route.

  Strengths

  Spot earnings rebounded sharply, with average earnings rising to about USD 195,000/day last week; VLCC demand also supports the newbuilding market.

  Weaknesses

  Most operators are still watching the pace of vessel releases in the Gulf, and transit volumes remain far below pre-conflict levels.

  Comparison

  Although average daily transit through Hormuz rose from about 10 vessels to 25 vessels, it is still well below the pre-conflict level of 125 vessels.

  Risks

  Repeated geopolitical conflict, slower-than-expected corridor recovery, delayed vessel releases, and a rapid pullback in spot freight rates.

• Container shipping

  Affected by Chinese port throughput, cargo volumes on Asia-to-U.S. routes, and SCFI mainline freight rates.

  Strengths

  Throughput at major Chinese ports increased 3% sequentially and 2% year on year, while the overall SCFI rose 5% sequentially and 67% year on year.

  Weaknesses

  Port of LA imports declined year on year, and some end-market demand remains uneven.

  Comparison

  The Shanghai-West Coast U.S. route rose more than the Shanghai-Europe route, with the table showing a 105% year-on-year increase for the West Coast U.S. route.

  Risks

  Cargo volumes may fall after front-loaded shipping ends, demand may slow, and rerouting around the Red Sea could trigger a new supply-demand rebalancing.

• Dry bulk carriers

  Affected by the BDI, Capesize earnings, and changes in bulk commodity trade flows.

  Strengths

  The BDI is up 43% year to date, and average Capesize earnings rose 11% sequentially last week.

  Weaknesses

  The BDI fell 4% sequentially last week, indicating a short-term softening in the dry bulk market.

  Comparison

  Dry bulk's near-term performance is weaker than the upward momentum in VLCC and container freight rates.

  Risks

  A slowdown in bulk commodity demand, insufficient global manufacturing and infrastructure demand, and changes in fleet supply.

• Shipbuilding/Newbuilding prices

  Affected by VLCC and gas carrier demand as well as the global fleet renewal cycle.

  Strengths

  The newbuilding price index was broadly flat sequentially and remained elevated, with continued demand for VLCCs and gas carriers.

  Weaknesses

  Elevated prices may affect the pace of new orders and shipowners' capital expenditure decisions.

  Comparison

  Shipbuilding prices are more stable than dry bulk freight rates, reflecting longer-term orders and capacity constraints.

  Risks

  A global trade slowdown, higher financing costs, and weaker shipowner ordering appetite.

Key data

• Average daily transit through the Strait of Hormuz25 vesselsRecovered last week from about 10 previously, but still below the pre-conflict level of 125 vessels.
• Average VLCC earnings from the Middle East/West Africa to China+87% to about USD 195,000/dayReflects market expectations for the Persian Gulf to reopen and for VLCCs to enter the Gulf.
• Container throughput at major Chinese ports+3% WoW, +2% YoYIndicates continued improvement in container shipping demand.
• Overall SCFI freight rate+5% WoW, +67% YoYMainline freight rates continued to rise.
• SCFI Shanghai-Europe route+3% WoW, +72% YoYThe table shows a 72% year-on-year increase for the week of 2026-06-19.
• SCFI Shanghai-West Coast U.S. route+11% WoW, +105% YoYThe strongest freight-rate increase among trans-Pacific-related routes.
• Port of LA imports-12% YoYThe report mentions a YoY decline in Week 25 and also expects roughly a 6% decline in Week 25; this statement reflects a methodology or time-window discrepancy.
• BDI-4% WoW, YTD +43%The dry bulk market weakened sequentially last week, but remains clearly up year to date.
• Average Capesize earnings+11% WoWDespite the BDI pullback, Capesize earnings rebounded sequentially last week.
• Newbuilding price indexBroadly flat sequentially and remained elevatedDemand for VLCCs and gas carriers continues to support newbuilding prices.

Impact & implications

In the near term, the resumption of transit through Hormuz and the release of vessels in the Gulf will directly affect tanker spot freight rates and VLCC earnings; the simultaneous strengthening of container demand and the SCFI is favorable for earnings expectations in the container shipping chain; dry bulk weakened on a sequential basis, but cumulative performance remains strong this year, so it remains to be seen whether this is only a short-term fluctuation; elevated newbuilding prices indicate that shipyards still have pricing power and order quality remains supported. For investors, the report is more of an industry cyclical tracking signal than a direct recommendation on a single company.

Risks

• A contraction in investment at the China macro level could dampen demand for industrial goods and import/export volumes.
• If the Chinese economy remains weak, demand for industrial goods or trade volumes may contract, leading to slower growth.
• The removal of policies such as tax incentives for high-tech enterprises could affect the profitability of related companies.
• Intensifying competition from domestic and foreign companies could lead to market share loss.
• There remains uncertainty around the resumption of transit through Hormuz and the Persian Gulf, and progress in vessel releases may affect tanker freight rates.
• Persistently high rerouting around the Red Sea may continue to disrupt container ship supply and route efficiency.
• AIS data contain noise, and although they have been cleaned and benchmark-validated, data-definition errors still need to be monitored.

What to watch

• Whether average daily vessel transits through the Strait of Hormuz can continue recovering from 25 vessels toward pre-conflict levels.
• Progress in vessel releases within the Persian Gulf and changes in the number of tankers departing Hormuz eastbound.
• Whether VLCC earnings from the Middle East/West Africa to China can remain elevated, or fall back sharply after transit recovery.
• Weekly changes in SCFI, CCFI, and freight rates on the Shanghai-Europe, Shanghai-West Coast U.S., and Shanghai-East Coast U.S. routes.
• Whether container throughput at major Chinese ports and in-transit volumes on Asia-to-U.S. routes continue to post year-on-year growth.
• Whether the BDI and Capesize earnings confirm stabilization in the dry bulk market.
• Whether Clarksons and CNPI newbuilding price indices remain elevated.