Korean shipping stocks rallied across the board after the United States decided to control the Strait of Hormuz. While top market-cap stocks on the KOSPI traded mixed throughout the session, HMM (011200.KS) held onto steady gains in the 2-3% range. STX Green Logis and Heung-A Shipping also extended their gains, a move interpreted as reflecting expectations that maritime freight rates will rise.
According to the Korea Exchange, HMM was trading at 20,000 won as of 2:25 p.m. on the 14th, up 450 won, or 2.30%, from the previous session. Holding gains of 2-3% throughout the day, it charted a different course from other large-cap KOSPI stocks. STX Green Logis, grouped with HMM as a shipping stock, hit its upper price limit, while Heung-A Shipping (2.92%) and others also traded strongly.
The market attributes the moves to the fallout from the reclosure of the Strait of Hormuz amid rising tensions between the United States and Iran. With the United States resuming airstrikes on Iran, and Iran responding by reclosing the Strait of Hormuz, U.S. President Donald Trump said he would impose a 20% charge on cargo passing through the Strait of Hormuz. As a result, U.S. West Texas Intermediate (WTI) crude futures for August delivery jumped 9% from the previous session to around the $78 level.
The Strait of Hormuz is regarded as a key shipping route through which about 20% of the world's seaborne crude oil passes. For this reason, a blockade of the Strait of Hormuz is seen as an event signaling future increases in maritime freight rates. If shipping through the strait is disrupted, vessels would have to use detour routes or pay higher insurance premiums, which is viewed as a positive for shipping stocks.
Amid the surge in oil prices, refining stocks also continued to rise. As of 2:25 p.m., Heunggu Oil was changing hands at 12,380 won on the KOSDAQ market, up about 7% from the previous session. Other refining stocks, including Korea Petroleum (1.65%), were in a similar situation.
