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Norden announces fourth upgrade this year due to product tanker upswing

The shift from dry bulk to product tanker during Q2 has seemingly worked out well for Danish carrier Norden, which now expects a 2022 result of USD 560-640m.

Photo: Lars Krabbe/ERH

Dry bulk and tanker operator Norden has made its fourth upward adjustment this year after a change in market exposure from dry bulk to product tanker during the second quarter, according to a company statement Thursday afternoon.

Norden now expects a full-year result of USD 560-640m against USD 420-500m previously.

According to the carrier, it’s not least the change in business focus launched during the second quarter which is behind the upgrade.

Scorpio Tankers turns deficit around to major profit in Q2

”In addition to ensuring downside protection in a weakening dry cargo market, Norden actively booked a considerable amount of cargoes at high rates, and we are now benefitting from subsequently taking in tonnage at lower rates,” says CEO Jan Rindbo in the statement.

Even though both dry bulk and product tanker have advanced since the beginning of 2022, it is particularly within the tanker segment that the market appears solid and that long-term expectations are strong.

Product tanker upswing

The first results from competitors and some of the major product tanker carriers have reflected a sector optimism not seen for a long time. The most telling example is without a doubt Scorpio Tankers where CEO Robert Bugbee has been eyeing an upturn for a long time, a claim that is now backed by the financial results.

The New York/Monaco-based carrier landed a Q2 profit of USD 191.1m against a net loss of USD 52.8m in the same period last year, according to the company’s Q2 interim result posted last week. It arrived the day after Irish company Ardmore had announced a record profit of USD 28.8m.

Norden [has] actively booked a considerable amount of cargoes at high rates

NORDEN CEO JAN RINDBO

The top executives within product tanker agree that the upswing may last in the long term, as a number of positive factors do not appear to be changing any time soon.

According to Ardmore CEO Anthony Gurnee, the positive trend is, among other factors, due to the global energy crisis following the Ukraine war which is affecting the tonne-mile effect, meaning transports are increasing in length. Furthermore, it’s due to the world moving past the coronavirus pandemic, and that demand for refined oil products such as jet fuel is surging.

Inflation is a joker

As Torm CEO Jacob Meldgaard told ShippingWatch last week, there are certain factors that may limit the market growth, among them a resurgence of Covid and shutdowns of important economies. New economic ground rules are another.

Ardmore achieves record result in second quarter

”Globally, demand for oil has kept the pace so far in 2022 despite the generally higher price level for oil products. But headwind is likely later in the year and into 2023. This is due to the general inflation pressure, further interest rate increases from the central banks, expensive energy costs, and the overall economic slowdown,” said Meldgaard.

Dry bulk carriers releasing financial reports recently have overall landed solid results.

Dry bulk index Baltic Dry has, however, been declining of late. Yesterday, it decreased by 7.4% to 1,603.

English edit: Kristoffer Grønbæk

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