Market rates for panamax container vessels will improve but it takes “big balls” for investors to spend money on buying larger boxships on the second-hand market, said George Youroukos of Poseidon Containerships and Technomar.
“To find large ships, which would be my choice for investment… is an obvious investment - you need balls, you need big balls, because right now it looks really dark,” Youroukos told a Capital Link conference on the first day of Posidonia.
“But, as Warren Buffett said, you should invest when people think you’re crazy.”
Panamax freight rates should start improving in about a year’s time as they are taking over business from smaller ships, Youroukos estimated.
However, finding such vessels on the secondhand market was difficult, he added.
“Unfortunately, in containers, liquidity hasn’t been there in KG market over the last seven years. Most of the KG ships… are usually in horrible condition and no candidates to buy,” he said.
Other top boxship players expressed optimism that containership freight rates might be on their way up, if for no other reason that the current slump has gone on for too long to continue.
“In general we’re positive - the crisis is now entering in September its ninth consecutive year - this can’t go on forever,” said Achim Boehme, CEO of Lomar Shipping.
“The market can change quite fast. It will change, the question is when.”
Boehme said that the cascading effect seems to be fading.
“The liner guys are organizing themselves in a way that we are more or less reaching the end of cascading -- I hope we won’t see more pressure from larger vessels coming down.”
Aristides Pittas, CEO of Euroseas, said: “We have a base case that 2016 and 2017 look very tough because huge supply will come and there’s small demand.
“We may be very, very wrong. I just believe, when we’re at a very low level, as we are today, the chances are that we will go up.”
