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Diana Containerships Inc. (DCIXV) Message Board

  • barrygeo barrygeo Mar 30, 2013 9:16 PM Flag

    Rate Hike plan fails for Maersk

    Overcapacity Trumps Rate Hike Plan, Maersk Shares Fall
    BY BLOOMBERG ON MARCH 22, 2013

    (Bloomberg) — A.P. Moeller-Maersk A/S, the world’s largest container line, fell the most in four days in Copenhagen as freight rates out of China declined, suggesting the industry is failing in a joint effort to boost prices.

    Maersk’s B shares fell as much as 1.4 percent, the most since March 18. The stock lost 0.9 percent to 46,240 kroner at 11:04 a.m. local time, with trading volume at 40 percent of the three-month daily average. The drop was deeper than a 0.4 percent decline in the Nasdaq OMX Copenhagen 20 index.

    Container companies, including Copenhagen-based Maersk Line, have said they plan to raise rates this month and next in an effort to combat price declines caused by overcapacity. The Shanghai Containerized Freight Index, a measure of box rates out of China, fell 4.7 percent today, the most since November.

    “The proposed rate increases are turning out to be a failure as there’s too much overcapacity,” Jesper Christensen, an analyst with Alm. Brand A/S in Copenhagen, said by phone. “This isn’t good for Maersk as today’s data show that last week’s gain — to a large extent — is disappearing already.”

    The index, which jumped 13 percent last week, has lost 23 percent from a May 4 peak last year.

    Maersk Line cut capacity on the Asia/Europe route — its biggest — by about 21 percent last year amid a slowdown in demand. The shipping line said Feb. 22 that profit this year will be higher than the $461 million reached in 2012 as the company cuts costs and as growth in global container demand accelerates.

 
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