On May 29, COSCO Shipping Energy (01138) fell 3.05% in regular trading, trading at HK$15.9/share, with trading volume of approximately HK$145 million, extending its multi-day decline.

On the news front, the Strait of Hormuz blockade continues to lack substantive breakthroughs, with strait traffic volumes remaining at low levels. The oil shipping market is in an overall oversupply state, compounded by peak off-season conditions. VLCC tonnage significantly exceeds available cargo, with combined cargo bookings from March to May declining 54% year-over-year. Guosen Securities noted that oil shipping freight rates are currently at a floor support level and that the volatile pattern already reflects stable conditions.

Additionally, the company recently announced a RMB 1.018 billion capital injection into its subsidiary for constructing VLCCs and Aframax crude oil tankers, and signed LR2 newbuild charter contracts totaling approximately RMB 800 million. The capital expenditure expansion has raised market concerns over future cash flow and profitability, further intensifying selling pressure.

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