Capesize bulk carrier Nord Energy. Photo: Norden AS
COPENHAGEN, March 2 (Reuters) – Danish shipping company D/S Norden said the dry cargo market reached its lowest point last year and will not recover this year under the weight of overcapacity and the Chinese economy’s transition away from an industrial economy.
China’s insatiable appetite for coal and iron ore that profitable freight rates for dry cargo vessels has now gone, Chief Executive Jan Rindbo said on Wednesday.
“The industry undergoes huge changes these years. It is connected to the transformation of China’s economy to a service-driven economy from a industrial-driven economy,” Rindbo told Reuters.
Copenhagen-based D/S Norden reported a 2015 loss of $284.9 million, from a loss of $415.6 million the year before.
The average growth rate for transported dry cargo has been around six percent the last ten years but growth is now flat, Rindbo said.
“It is mainly import of coal to China that has fallen. Iron ore import has gone up a bit as a result of the production of iron ore in China has been replaced with imported iron ore,” Rindbo said.
The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry bulk commodities, has lost about 98 percent of its value from a peak of 11,793 in May 2008, marking the lowest level since records began in 1985.
D/S Norden has reduced its fleet by selling some vessels and cancelled some vessels ordered from shipyards in Japan but the shipper still has more than 200 vessels.
With combined cash and credit facilities of $663 million at end of 2015 D/S Norden is better capitalised than many other shipping companies in the industry.
“More scrapping of old vessels is needed to restore balance between supply and demand but it will take years,” Rindbo said.
The global dry bulk fleet amounts to around 9,950 vessels and orders for around 1,250 vessels has been placed with shipyards.
“Many new vessels are expected to hit the water in 2016, although recent cancellation activity has improved the outlook,” said Maersk Broker. (Reporting by Ole Mikkelsen, editing by Louise Heavens)
(Bloomberg) — Ukraine’s fight against Russia’s invasion has entered a new phase, pitting homegrown drone technology against a 2,000 kilometer (1,200 mile) swathe of largely Soviet-era oil facilities. At least...
March 19 (Reuters) – Tanker company Euronav will exit Belgium’s blue-chip Bel-20 index after just two days of trading, as it no longer meets the membership conditions after its takeover by Compagnie Maritime...
MOSCOW, March 19 (Reuters) – The new head of Russia’s Navy was formally presented in his new role for the first time on Tuesday at a pomp-filled ceremony, the state RIA news agency reported,...
March 19, 2024
Total Views: 2487
Why Join the gCaptain Club?
Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.