Norden’s CEO Jan Rindbo has predicted improvements in the dry bulk market after all-time low rates in 2016, which began to see benefits from China's increased activity during the year.
In an interview with ShippingWatch, Rindbo (pictured) said: “We are seeing a gradual improvement of the [dry bulk] market, and we expect this to continue throughout 2017. There are still many new vessels set to be delivered from the yards this year, and we are thus looking to 2018 before we see a significantly smaller orderbook than is the case today.”
The carrier expects to be able to achieve a profit for 2017, even with challenging market conditions, after an increase in its operating activity by 7% in 2016 and a series of initiatives implemented last year.
It controls a fleet of 199 dry bulk vessels and has made adjustments to its core fleet to achieve savings, with deliveries of vessels pushed back and discounting the vessels it charters by prepaying hires, reducing its costs and achieving annual savings of US$15 million through the cost reduction program.
Norden is also planning to expand operating activities in its dry bulk business through combining cargoes from customers with vessels chartered on short-term contracts.
The company also announced that it had hired Christian Vinther Christensen as the new head of the Dry Cargo Department in November last year to manage “the significant strengthening of the operator activities in the dry cargo business”.
Technical Paper: How to Navigate the Dry Bulk Market
Drewry, a global shipping consultancy, reported at the start of February that earnings in the dry bulk market are expected to improve from 2017 with a narrowing supply-demand gap.
It estimated that demand will grow at a pace of 3% while supply is expected to grow by about 1% from 2017, “making the dry bulk segment an interesting market to invest in”.
Rindbo concluded his interview by predicting that Norden will see “somewhat larger activity as operator”, but added that it's a matter of creating “the right structure.”
In a letter to Norden's stakeholders, Rindbo said: “In the coming year, the market conditions will still be challenging, but 2017 will also be a year where NORDEN is ready to seize new business opportunities and bring the organisation’s full potential into play to the mutual benefit of employees, the company, its business partners and the local communities, where Norden operates.”