* 2013 to be last of the worst years to dry bulk firms
* Liquid players positioning for asset bottom-fishing
* Banks, ship builders differentiating more between clients
* Newbuild prices have halved since 2007
By Balazs Koranyi
OSLO, March 12 (Reuters) - Some lion-hearted investors in dry bulk shipping, heading into a shakeout that will put some companies out of business, are already positioning for the rebound of the solid players that survive, top executives said.
Prospects for operators of dry bulk vessels, which carry everything from grains to iron ore, have yet to hit bottom, but an expected rise in bankruptcies and an increasingly selective approach by lenders and shipbuilders may present golden opportunities for risk-aware investors.
"If you want to triple or quadruple your money, traditional shipping is your choice, because it's down on its knees," Pankaj Khanna, the chief operating officer at DryShips Inc, said.
"The question is how much appetite you have for risk, what's your lead time and whether you have the liquidity to avoid bankruptcy." he said.
The dry bulk shipping market - along with tanker and container shipping - has sunk deep into depression in recent years as a slew of ships ordered in the boom period of 2007 to 2009 hit the seas, creating huge overcapacity while the global economy struggles to recover.
Freight rates for capesize vessels, those too big to pass through either the Panama or Suez canals, reached a peak of over $230,000 a day in 2008 but have slid to just over $5,000 last week, below operating cost levels.
Dry bulk fleet utilization will drop to just 80 percent this year, a far cry from 95 percent in 2007, as the global fleet expands by about 12 percent even taking into account the scrapping of old ships and some deferrals of new orders, Morgan Stanley estimates.
That has pulled the price of newly built capesize vessels down to around $46 million, less than half of the 2007 peak.
And those new vessels are even more attractive because they are more fuel-efficient, reducing fuel usage by as much as 20 percent.
Golden Ocean, backed by Norwegian-born shipping magnate John Fredriksen, has already announced plans to expand its fleet, considering new ships for delivery when the market's upturn in 2014 begins.
"We try to buy when the market is the worst ... 2013 should be the last of the worst (years)," Golden Ocean Chief Financial Officer Birgitte Vartdal said.
"Some have to take care of their internal distress, and some can take advantage of this opportunity. We think there will be only a few owners who can capitalize on this and obtain financing."
Bank financing is difficult to arrange as lenders try to limit their exposure, while a firm such as Golden Ocean also has an advantage with builders, who increasingly prefer customers with demonstrated financial strength, Vartdal added.
DryShips, run by Greek magnate George Economou, already has around a dozen new ships on order, with financing issues already sorted, Khanna said.
"People have been talking about distress in the shipping market for three years, but this is the first year that we just started to scratch the surface with bankruptcies, said Khanna.
Harald Serck-Hansen, the head of the shipping division at DNB Bank, the world's top arranger of shipping loans, said shipping is a cyclical business and that even if dry bulk is down, it will come back up again.
"Dry bulk is like the pop-up doll that is forever doomed but refuses to surrender," he said.
The industry expects 2014 to be the sector's first year of improvement, but DNB sees potential for an upside surprise as financial distress quickly weeds out some players.
"You'll see cancellation, scrapping, slow steaming because of the high fuel cost. There is a chance that dry bulk will surprise on the positive side. We think that capacity reduction will be bigger than forecast," Serck-Hansen said.