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Capes on the way out, says Noble's NaglerCapes on the way out, says Noble's Nagler

More commodities trading houses should own ships and good buys would be kamsarmaxes and supramaxes, according to Noble Group head of global freight Michael Nagler.

Vincent Wee, Hong Kong and South East Asia Correspondent

April 7, 2017

1 Min Read
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Speaking at Marine Money's 10th Hong Kong Ship Finance Forum, Nagler said he was "modestly optimistic" that we will see freight rates rise from current levels. However looking further down the track he was bearish on the China iron ore trade, although he admitted that there is currently still good demand.

"We still see very good demand in China but eventually that market will mature and that's why we would not want to invest in capes; we feel capes have done their thing, probably they have another ten years but eventually it's going to slow down, it cannot continue at the current pace," Nagler said.

"We would want to invest in something that's diversified such as supramax, kamsarmax, panamax," he said.

"We're very bullish grain," Nagler said, noting that meat consumption in China is increasing dramatically and exports from both South and North America are rising sharply. "We would want to have an asset can load various commodities such as grain, coal, bauxite and so on," Nagler said.

He also noted the two-tiered market that is developing between the big mining houses which still see freight as just simply transport and the other commodities trading houses such as grain traders which have moved into becoming industrial shipowners.

"In my mind they should be having very large shipping divisions because they have the keys to the market and know exactly what is happening," he said. However they have chosen to outsource while grain traders have taken on more of their shipping needs themselves.

"So there's this disconnect and the large mining houses should have very large shipping portfolios and should own ships," he concluded.

About the Author

Vincent Wee

Hong Kong and South East Asia Correspondent

Vincent Wee is Seatrade's Hong Kong correspondent covering Hong Kong and South China while also making use of his Malay language skills to cover the Malaysia and Indonesia markets. He has gained a keen insight and extensive knowledge of the offshore oil and gas markets gleaned while covering major rig builders and offshore supply vessel providers.

Vincent has been a journalist for over 15 years, spending the bulk of his career with Singapore's biggest business daily the Business Times, and covering shipping and logistics since 2007. Prior to that he spent several years working for Brunei's main English language daily as well as various other trade publications.

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