NORDEN buys bigger ships, sees China commodities trade picking up

By Jonathan Saul

LONDON (Reuters) – Shipping group NORDEN has acquired larger capesize dry bulk ships, aiming to benefit from China’s economy reopening and expectations of a pick up in commodities trade, the Danish company’s CEO said.

Three years of rigid border controls and sweeping lockdowns during the pandemic have sapped business confidence in China, especially among foreign firms, according to sentiment surveys.

China has set itself a target for gross domestic product growth of around 5% this year, after significantly missing its target for 2022. That is lower than the International Monetary Fund and some private forecasters think it can achieve.

NORDEN has acquired four capesize ships and is separately looking at chartering in further capesize vessels going forward as part of its strategy, Jan Rindbo said. 

“With the reopening of China after COVID, we can see right now at least that sentiment and demand is much more China driven than it is world GDP driven and that tends to favour the capesize segment more,” he told Reuters.

Capesizes, among the largest dry bulk ships, typically haul industrial commodities such as coal and iron ore and are a vital transport link for China’s trade. Other commodities such as bauxite are also being increasingly shipped on capesizes.

Tighter ship availability, due to a low order book for the first time in years, has also supported prospects for the dry bulk sector.

“We are still worried about the global economy and the banking crisis has not helped that picture,” Rindbo said.

“But at the same time, we also feel that the order book is very low. With the Chinese economy seemingly kicking into a higher gear, there is room for some optimism.”

NORDEN’s operated fleet averages over 450 ships including over 300 dry bulk ships and more than 100 oil products tankers.

Rindbo said larger ships also provided “freight and also emissions savings”.

(Reporting by Jonathan Saul; Editing by Mark Potter)