“At the moment, given the sea change in the supply-side of the equation, we are seeing a huge number of ships coming on into the market,” Sen told CNBC.
“In 2009, we had about 450, and this year, the order book is expecting to see well-over 1,400 ships. It will reflect not changes in the demand because supply-overhang is going to keep a lid on rates.”
Instead of the Baltic Dry Index, Sen said looking at the port congestion is a more accurate guide.
Mavrinac agreed and added that the Baltic Dry Index has never been the perfect economic gauge.
“The Baltic Dry Index reflects the charter rates or earnings of dry bulk assets across a variety of asset classes,” he said. “So the demand for those commodities is one part of the equation, but so is the supply of new ships and so you have to see how those two variables match up.”
Mavrinac also recommended looking at the number of ships that have been secured with contracts or at port congestion instead.
“If ports are busier, there’s obviously an increase in global trade,” he said. “So we tend to focus on the number of ship-securing contracts, core congestion as a measure of what’s going on in the demand side of the equation.”
As for stock picks, Mavrinac likes Data Shipping and Genco Shipping .
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No immediate information was available for Sen or her firm.
Mavrinac does not own shares of DSX or GNK.