Analyst: Price discipline ready to collapse

Price war and freight rates dropping like lead will affect Maersk Line, Alm. Brand Markets Analyst Jesper Christensen says. Losses and share disposals are expected.

Photo: Maersk Line

The positive development in the container industry this summer has ended resulting in stories about price war, falling freight rates and possible losses finding their ways to the front page again. This makes Maersk Group Analyst with Alm. Brand Markets, Jesper Christensen, recommend selling the shares. Furthermore, he expects a downgrading of the expectations to Maersk Line’s third quarter results.

Thus, Alm. Brand Markets changes its recommendation of the share from “buy” to “sell, lowering the target price drastically from USD 8,800 dollars to USD 6,000. “Falling container rates without an effective response from the shipping companies makes us declare the price discipline dead and the rate war begun”, Alm. Brand Markets announces. The recent months’ development resulting in a rate drop of 25 % has prompted this new impression of the market. This has resulted in a drastic change in the estimates of Alm. Brand Markets. Now, Jesper Christensen predicts a fall in rates between Asia and Europe from USD 1,200 ultimo 2012 to USD 1,100 ultimo 2013.

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