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Commodore Research: Panamax doom and gloom

New York: He is one of the best known names in dry bulk commentary and a welcome addition to the soon-to-launch Maritime CEO magazine roster of analysts. Jeffrey Landsberg is the managing director of New York-based Commodore Research & Consultancy. Prior to Commodore, Landsberg was a senior exchange broker at the International Maritime Exchange (IMAREX) and spent a large portion of his broking career working in Oslo and Singapore.  Landsberg began his career focusing on dry bulk shipping and commodities as an analyst for Hanjin Shipping in Seoul.  He joins a distinguished panel of analysts on the Maritime CEO magazine roster including Charles De Trenck on containers and Dr Martin Stopford providing insightful tanker input.

Despite watching dry bulk freight rates languish at very low levels for much of the year owners have shown a tremendous amount of optimism for the future and are on pace to order more new vessels this year than during any single year since 2010, Landsberg notes. During the first five months of this year alone, orders were placed for 266 new dry bulk vessels, Commodore data shows. In comparison, the first five months of 2012 saw orders placed for 131 dry bulk vessels.
“The market has been anticipating that rates are set to increase by a moderate amount in the upcoming years, which has caused a surge of optimism to continue to spread among owners,” Landsberg explains.
Landsberg is well known for his contrarian points of view. When questioning whether this optimism is warranted he says it is for the much maligned capesize sector, less so for other bulker segments.
While the last three years have seen capesize newbuilding deliveries exceed 200 vessels each year, deliveries in 2013 are on pace to total roughly 100 vessels, he points out. Growth in the capesize fleet is expected to decline even further next year, with only 75 capesize vessels anticipated to be delivered in 2014.
“Prospects for the panamax market, on the other hand, are much less promising than prospects for the capesize market, and a strong case can be made suggesting the recent surge in panamax orders has not been warranted,” Landsberg argues. By the end of the year, approximately 370 panamax vessels will likely have been delivered, which would be just under the 375 panamax vessels delivered last year. The panamax market is the only segment of the dry bulk market that is likely to see newbuilding deliveries this year come close to exceeding the amount of vessels delivered last year.  In addition, roughly 150 additional panamax vessels are expected to be delivered in 2014.
Owners continue to sow the seeds of their own downfall it would appear in the panamax sector.  [26/06/13]
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