Norden Changes Focus to Buying Bulk Carriers Amid Vessel Glut
Norden will order new fuel-efficient vessels this year that will join its core fleet of 80 when rates are expected to be higher in two years, the Hellerup, Denmark-based company said in an e-mailed newsletter today. Norden was previously focused on oil-products tankers, ordering four in 2011, according to the newsletter.
Norden plans to build more ships at a time when the global fleet exceeds demand, causing rates to slump. Seaborne trade in commodities including iron ore and coal will advance 5 percent this year while the capacity of carriers expands 7 percent, according to Clarkson Plc, the world’s largest shipbroker. Prices for new ships have decreased to an attractive level, Norden said.
“They are built while the rates are low and will not hit the water until the market has started to improve as a result of better balance between tonnage supply and tonnage demand,” Ejner Bonderup, head of Norden’s dry cargo department, said in the newsletter. “Our premise for investing in new dry cargo vessels is that we can employ them at attractive rates. Therefore, the timing is right.”
The Baltic Dry Index, a measure of raw-materials shipping costs, is having the worst start to a year since at least 1985, averaging 785 so far, according to the Baltic Exchange, the London-based publisher of freight rates. The gauge rose 0.8 percent to 930 today.
Daily earnings for Capesizes, the largest vessels tracked by the index, fell 0.7 percent to $5,048, according to the exchange. The three other ship types each increased by about 1 percent: Panamaxes to $9,616, Supramaxes to $10,125, and Handysizes to $7,985.
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