Core Viewpoint - The article discusses the positive impact of easing trade tensions between the US and China on the shipping industry, highlighting a rebound in shipping indices and expectations for improved demand and pricing in the maritime sector [2][3]. Short-term Logic - Trade easing and the initiation of a replenishment cycle are expected to support freight rates during the peak season in Europe and the US [2]. - The increase in freight rates on US routes has been confirmed, while the extent of increases on European routes remains uncertain [2]. - Strategy suggests holding long positions in peak season contracts, with a reduction in positions if prices stagnate [2]. Macro Events Driving Shipping Index - High-level talks between the US and China on tariff issues led to significant progress, boosting market optimism and resulting in a strong rebound in shipping indices [3]. - The US announced a 90-day suspension of tariffs on Chinese goods, which is expected to stimulate trade volumes and improve short-term shipping demand [3]. Supply and Demand Fundamentals - Supply side: The trade war has led to a significant drop in cargo volumes on US routes, with a notable number of sailings canceled. However, the reduction in tariffs is expected to lead to a quick recovery in cargo volumes [7][8]. - Demand side: The adjustment of tariffs is anticipated to increase bilateral trade volumes, with US importers likely to ramp up orders from China during the 90-day suspension period [8]. - Seasonal patterns indicate that European industrial goods replenishment typically occurs in May and June, which may further enhance demand [8]. Freight Rate Dynamics - Following the tariff reductions, shipping companies have begun to raise freight rates in anticipation of increased demand, with specific rate hikes already announced [9]. - The article notes that while the US routes are seeing immediate benefits, the European routes have not yet shown significant increases in cargo volumes, leading to skepticism about the sustainability of price increases [9]. Medium to Long-term Analysis - Despite a temporary easing of tariff tensions, structural issues in US-China trade relations remain, posing ongoing challenges for the shipping market [10]. - The success of shipping companies' pricing strategies during the peak season will be crucial for freight rates and the overall shipping index [10]. - The strategy suggests being cautious about chasing high prices and looking for opportunities in specific contract spreads [10].