Goldman Sachs: Bullish on Tankers, Bearish on Containers; Strait of Hormuz Reopening as Key Catalyst

Overview

Goldman Sachs attended the COSCO Group Investor Day held in Shenzhen on June 11, 2026. The report highlights a distinct structural divergence in the current shipping market. In tanker shipping, although the blockade of the Strait of Hormuz has suppressed some demand in the short term, its reopening is expected to trigger a strong rebound in crude oil restocking demand. In container shipping, catalyzed by low inventories in Europe and the US and tariff policies in the short term, the peak season has arrived early and is likely to extend through August; however, the sector faces medium-to-long-term overcapacity pressure from new vessel deliveries. Overall, Goldman Sachs clearly prefers the tanker sector over the container sector.

Core views

Tanker Shipping (COSCO SHIPPING Energy): The closure of the Strait of Hormuz has reduced Middle East crude exports by approximately 15 million barrels per day, a shortfall currently partially offset by exports from Yanbu, Fujairah, and pipelines. Due to the strait closure, current VLCC Time Charter Equivalent (TCE) earnings are down 38% compared to pre-conflict levels. However, Goldman Sachs emphasizes that the reopening of the strait is the single largest upside catalyst for the tanker sector; global crude inventories had already fallen 3% below pre-conflict levels by end-May, and route restoration would spark intense restocking demand. COSCO SHIPPING Energy management confirmed that no VLCCs are currently stranded in the Gulf, with approximately 45 vessels earning spot rates and the remainder on long-term charters yielding ~USD 50k/day, well above the breakeven point of USD 33k/day. Additionally, shortened maintenance cycles for older tankers and eco-speeding will further tighten effective supply. Based on this, Goldman Sachs maintains a Buy rating on COSCO SHIPPING Energy A/H shares with target prices of RMB 33.0 and HKD 30.0, respectively. Container Shipping (COSCO SHIPPING Holdings & OOCL): The recent rebound in container spot rates is largely attributed to resilient consumption in the US and EU, e-commerce pre-shipments triggered by low inventories, and reduced effective capacity due to port congestion. OOCL management expects that, impacted by the EU's July tariffs on small parcels and the expiration of US tariff exemptions for China in November, this container peak season will start early and last until mid-August 2026. However, significant supply-side concerns remain, with new vessel deliveries in 2026 projected to grow ~5% YoY. OOCL disclosed that 2026 long-term contract rates have been reduced by approximately USD 200-300/FEU YoY, guiding for a YoY decline in full-year revenue and earnings. Goldman Sachs expects the container market to face persistent overcapacity in the coming years; if the Red Sea reopens, an additional ~10% of effective capacity could be released. Therefore, it maintains a Sell rating on COSCO SHIPPING Holdings A/H shares with target prices of RMB 12.9 and HKD 10.9, respectively.

Analysis framework

Goldman Sachs employed a typical cyclical stock supply-demand fundamental analysis framework, deeply integrated with geopolitical event-driven logic. For tankers, the analytical focus centered on 'supply constraints + event-catalyzed demand elasticity,' deducing the explosive potential of freight rates post-reopening by tracking the supply-demand mismatch caused by the Strait of Hormuz blockade and the low level of global crude inventories. For containers, the main theme was 'short-term demand pull-forward vs. medium-to-long-term supply pressure,' demonstrating that the short-term peak season cannot reverse the long-term downward trend in freight rates by analyzing the overlap between pre-shipment effects driven by tariff policies and the new vessel delivery cycle.

Methodology notes

• Industry/Sector Analysis FrameworkSupply-demand framework

  Shipping Industry Supply-Demand Mismatch Analysis

  As a highly cyclical industry, shipping freight rates are primarily determined by vessel supply and cargo demand. The research report analyzes new vessel deliveries, scrapping of older vessels, and rerouting/slow steaming (supply side) against US/EU restocking and ton-mile demand from geopolitical rerouting (demand side) to determine that tankers and containers are at different stages of the cycle.

• Event Arbitrage & Behavioral FinanceEvent-driven analysis

  Geopolitical and Policy Event Drivers

  Expectations regarding the blockade and reopening of the Strait of Hormuz, as well as the effective dates of US/EU tariffs, are events that directly alter short-term industry supply and demand. The report quantifies the impact of these events (e.g., 15 million bbl/day crude shortfall, container pre-shipment windows) to assess the elasticity and sustainability of upward freight rates.

• Valuation MethodologyPB valuation

  P/B Valuation Based on Sustainable ROE

  For asset-heavy shipping companies, P/E valuation is often distorted due to extreme profit volatility caused by cyclicality. The report uses P/B (Price-to-Book) combined with estimated sustainable ROE for pricing (e.g., assigning a 3.1x target P/B to COSCO SHIPPING Energy A-shares), which better reflects the replacement value of fleet assets and their position within the cycle.

Asset mapping & comparison

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

• COSCO SHIPPING Energy (600026.SS / 1138.HK)

  Beneficiary: Expectations of Strait of Hormuz reopening and crude restocking demand will significantly boost VLCC rates.

  Strengths

  Owns the world's largest listed tanker fleet; no vessels stranded in the Gulf; LNG shipping business provides stable investment returns.

  Weaknesses

  Increasing proportion of vessels over 15 years old leads to higher maintenance costs and lower utilization.

  Comparison

  Faces more certain long-term supply constraints compared to the container sector.

  Risks

  Unexpected OPEC production cuts, higher-than-expected newbuild deliveries, or weak macroeconomic conditions leading to declining crude demand.

• COSCO SHIPPING Holdings (601919.SS / 1919.HK)

  Adversely Affected: Industry faces persistent overcapacity and downward pressure on long-term contract rates.

  Strengths

  Owns the world's fourth-largest container fleet; benefits in the short term from peak season pre-shipments triggered by tariff policies.

  Weaknesses

  Long-term contract prices have declined YoY; future earnings dragged down by newbuild deliveries.

  Comparison

  Fundamentals and cyclical positioning are significantly weaker than the tanker sector.

  Risks

  Red Sea reopening could release ~10% effective capacity causing cash burn; upside risks include better-than-expected demand or high dividends.

• OOCL (0316.HK)

  Adversely Affected: Industry overcapacity and lower long-term contract rates will weigh on 2026 performance (Not Rated).

  Strengths

  Fleet maintains normal sailing speeds, providing service advantages during periods of port congestion.

  Weaknesses

  Guided for YoY declines in both revenue and earnings for 2026.

  Comparison

  Faces the same industry headwinds and supply-demand dynamics as COSCO SHIPPING Holdings.

  Risks

  Peak newbuild deliveries in H2 2026 exacerbate oversupply.

Key data

• VLCC Breakeven Point~USD 33k/dayCOSCO SHIPPING Energy's long-term charter rate is ~USD 50k/day, indicating solid profitability
• Decline in Strait of Hormuz Transit Volume-95%Significant drop compared to pre-conflict levels
• May Global Crude Inventory Decline-3%Down from pre-conflict levels, implying potential restocking demand
• 2026 Container Newbuild Delivery Growth~5% YoYConstitutes medium-term supply pressure for the container sector
• EU/US Route Container Long-term Contract Rate Decline~USD 200-300/FEUYoY reduction reflecting market concerns over overcapacity

Impact & implications

The report suggests that the shipping market is experiencing a distinct divergence characterized by 'strong tankers, weak containers.' For tanker companies, the lifting of geopolitical bottlenecks will lead to volume and price increases alongside valuation recovery, making them attractive pro-cyclical assets for allocation. Conversely, for container companies, although profits can be maintained in the short term through locked-in long-term contracts and peak season pre-shipments, earnings face significant downside risks over the next two to three years amid concentrated newbuild deliveries and lower long-term contract rates. Investors must remain highly vigilant regarding capacity shocks from the restoration of routes such as the Red Sea.

Risks

• OPEC production cuts leading to decreased crude transport demand
• Higher-than-expected newbuild deliveries exacerbating overcapacity
• Weak macroeconomic conditions leading to declining crude and commodity consumption demand
• Red Sea reopening potentially releasing ~10% of effective container capacity

What to watch

• Timeline for Strait of Hormuz reopening and progress of crude restocking
• Impact of US/EU tariff policy changes on container pre-shipment demand
• Scrapping pace of global older tankers and implementation of eco-speeding
• Actual settled prices and cargo volumes in container long-term contract negotiations