Norden, now an operator of capesize and newcastlemax bulkers, is on the hunt to increase its fleet further by chartering in — and making additional buys, executives say.
Jesper Andersen joined Norden in August and is heading the capesize desk. He arrived from Oldendorff Carriers, where he was director of the South Pacific supramax and handysize desk.
“I think there’s still just a lot of money out there. Things are moving and I think we’ll have a very volatile cape market, probably a stronger cape market than the last year,” he told TradeWinds.
“With the high commodity prices, there’s a very strong underlying demand, and when you have high commodity prices, you tend to see maximum volume. The swing suppliers are very busy. I think we can expect coal will remain busy.”
Andersen has relocated from Singapore to Copenhagen for his new role and hopes to recruit an “ambitious” capesize trader in the Lion City in the near future.
Norden has taken five conventionally sized capesizes and one newcastlemax on charter. These join the five capesizes that it bought last year.
Most have been chartered in on index-linked contracts of around one year in duration.
Norden believes it will need to build an operated fleet of between 20 and 25 capesizes to have critical mass in the market. It is in no rush and has no set deadline for that target.
The initial focus will be the “classic” capesize business — iron ore, coal, bauxite — to offer an expanded service for clients.
The bigger vision is to leverage its capesize presence to help customers decarbonise their supply chains and reduce their Scope 3 emissions.
“… with long being such a blue-chip company, so advanced in the sort of ‘CO2 fight’, I think we can add a lot of value to big stock-listed companies like BHP and Rio Tinto and Anglo American,” Andersen said.
“I think that’s an easy sort of marriage to try and develop something with them. We have already also done deals with companies like Teck.”
A deal signed last year with Teck Resources will target a 25% reduction in annual carbon emissions from the Canadian miner’s steelmaking coal supply chain. Norden wants to pursue similar deals with other customers.
Jan Rindbo, chief executive of Norden, sees great potential in using larger bulkers to unlock economies of scale and efficiencies for customers.
Parcelling, for example, is something he thinks could help grow the company’s activities in the capesize segment over time by expanding the range of cargoes carried and potentially combining supramax or panamax shipments.
The acquisition of project cargo vessel operator Thorco Projects last year means Norden now has the capacity to handle small parcels of cargo up to 200,000-tonne shipments on board newcastlemaxes.
Asset-heavier
Rindbo told TradeWinds that it makes sense for Norden to be more asset-heavy within the capesize segment and it will “keep an open mind for adding more ships to the fleet also in the coming quarters”.
“It depends, of course, on finding the right ships, because it’s also fair to say that we are looking at ensuring that we get fuel-efficient ships into the fleet, because this is the most effective way to reduce your emissions in the short term,” he added.
“For a customer moving capesize cargoes, you can actually reduce your emissions by 35% just by choosing the right vessel available today. Then we can discuss everything else you can do to upgrade designs, put alternative fuels on.”
Norden invested in biofuel producer MASH Makes last year and Rindbo believes there will be “interesting opportunities” in using the fuel on board its capesizes.
“If you have very fuel-efficient ships with the ability to use biofuel, then you have the ability to offer your customers a totally green freight service, but also a freight service that is still at a competitive level, because the more expensive biofuel is now being used in ships that burn less fuel,” he said.
“The beauty of this is that this is not something that we can dream about delivering in 2030. This is something that we can actually talk to customers about today.”
