HSBC Cuts Container Inventories As US East Coast Strike Ends By Investing.com

Investing.com– HSBC downgraded major container stocks, forecasting a slowdown in gains, especially after disruptions from a short-lived strike on the US East Coast turned out to be less severe than expected.

The brokerage noted that while shipping had “thrived amid the chaos of 2024”, disruptions in the Red Sea were unlikely to create any pressure and that a US attack was no longer a threat.

This trend is expected to see demand outpace shipping supply sharply in 2025-2026, and shipping operators are likely to see increased pressure on earnings due to lower freight rates.

HSBC downgraded Evergreen Corp (NASDAQ: ) to hold from Buy and downgraded COSCO SHIPPING Holdings (HK: ) and Orient Overseas International Ltd (HK: ) to reduce from Holding.

The brokerage maintained its Buy rating on Maersk (CSE: ), citing improved margins in its logistics business, and also maintained its Buy rating on SITC International Holdings Co Ltd (HK: ) on strong cost management and shareholder return.

HSBC maintained its Reduce rating at Hapag Lloyd AG (ETR:) due to its expensive valuations.

Global shipping rates increased through 2024 as disruptions and reroutings in the Red Sea due to Houthi activity caused delays across the globe. A strike at US East Coast ports was expected to add to that pressure, although dock workers and port operators reached an agreement after just three days of strikes.

HSBC noted that any future failure could still present an upside for the shipping industry.

But container shipping is likely due for another down cycle, HSBC said, with milder growth in 2025 and a decline in 2026, especially if tensions in the Red Sea ease.