Marine Harvest ASA and Leroey Seafood Group ASA rose to the highest levels in more than a year in Oslo trading on bets for further gains in fish prices as the market recovers from a slump last year.
Marine Harvest, the world’s biggest salmon farmer, touched 4.6 kroner today, the highest since June 24, 2011, and traded up 1.9 percent at 4.56 kroner as of 12:15 a.m. in Oslo. Leroey, the second-largest fish farmer, gained 1.7 percent to 117.5 kroner, the highest since July 26, 2011.
“There’s growing optimism,” said Henning Steffenrud, an analyst at Swedbank First Securities in Oslo. “It’s looking very tight toward the end of the year and into 2013. Lower supply-side growth and even periods with negative supply growth from Norway indicate higher prices, and that’s clearly the expectation for the salmon sector right now.”
Shares in salmon producers tumbled last year as prices fell 60 percent to 18 kroner ($3.1) a kilogram (2.2 pounds) from April to October amid growing output from Norway and Chile, the world’s largest producers. Prices have since recovered to about 26 kroner a kilo, according to the latest update from NOS Clearing ASA, and are expected to continue rising as supply and demand rebalance, according to Steffenrud.
Swedbank First Securities forecasts an average salmon price of 26.5 kroner a kilo in 2012, 29 kroner next year and 30 kroner in 2014. The bank has a buy recommendation on Marine Harvest with a target price of 5 kroner a share, and on Leroey with a target of 130 kroner.
Marine Harvest, of which billionaire John Fredriksen owns 21.7 percent, has risen 75 percent this year. Leroey has advanced 42 percent in the same period.
“Demand has proven to be very strong, because it has absorbed the volume increases this year at relatively good prices,” Steffenrud said. “Prices have stayed at an even better level than what one might expect at this period of the year.”