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Norden Shipping sees recovery

Norden Shipping sees recovery
Danish dry bulk and tanker shipping company Norden Shipping is seeing signs of recovery amid the current uncertainty in global markets.

Norden Shipping sees recovery but challenges in ship supply overhang.

Danish dry bulk and tanker shipping company Norden Shipping is seeing signs of recovery amid the current uncertainty in global markets.

Like most shipping firms, it had a tough 2009 and sold off ships and reduced staff to cope with the downturn in trade volumes.

But the company has just bought three new ships and has 30 others on order to take advantage of the upswing in global demand.

The seas may seem calmer for ships these days as the global economy picks up.

But there are still hidden waves for the dry bulk shipping sector which transports bulk commodities like iron ore and coal.

The Baltic Dry Index, which measures freight rates for shipping commodities, has declined 40 per cent over the last 10 weeks as uncertainty continues to trouble equity and commodity markets.

The industry is also being plagued for an overhang of new ships that many companies ordered in the good times.

Analysts said this will put pressure on freight rates as supply continues to outweigh demand.

But Norden said it's positive about the oil tanker space, as demand is looking stronger in that sector and wants to buy more tankers to keep pace with the needs of the market.

Peter Borup, managing director & senior vice president, Norden Shipping (Singapore), said: ?The important thing is to buy back in at the right time. We also find that the asset prices in those markets are coming down to a level where from a historical perspective it makes sense to buy back in. And of course we are aware that we will not hit the bottom but if we can get within 10 per cent of that, then I think it's good.?

Norden has just bought three second hand tanker vessels to cater to growing demand for fuel shipments, a sign it's back on the expansion path after selling 17 vessels and shedding 15 per cent of staff last year.

But long term, growth in the dry bulk segment will be driven mainly by China, which Norden sees as sustainable.

Mr Borup added: ?We see a lot of demand growth in China and we don't have to be in China to benefit from it of course. But we're seeing iron ore imports continue to feed the infrastructure build up in China. We're also seeing a lot of coal being imported to China, but also to a number of other Southeast Asian countries and that's good for shipping."

Norden said it's possible that demand will soak up the oversupply of ships, but at this stage the recovery, the dry bulk sector remains uncertain.

www.turkishmaritime.com.tr

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