Christmas storm Dagmar to disrupt traffic in Nordic countries

Hurricane force winds are starting to be felt in Norway and Sweden as Dagmar-storm has made landfall. Wind gusts up to 45 meters per second have been measured on the Norwegian coastline. Ships working the oil rigs have had to withstand 20 meter waves. Several flights and cruises between Norway and Denmark have been cancelled. Motorists are advised to wait out the storm before hitting the roads. Storm warning is in effect for this evening and night.

Class 2 warnings are in place in Sweden with Norrland considered as the area most at risk. Swedish Transport Administration Trafikverket said that all rail traffic to and from Norrland will be stopped from 8 PM local time on Sunday onwards. Round about 10 trains north of Gävle should be affected. Conditions in Sweden are also expected to improve for Boxing day.

In Finland Dagmar is expected to bother Christmas return traffic on Monday. The storm is still expected to be near peak-strength when it hits Finland, with up to 30 meters per second wind gusts. Highest winds on land are expected from early morning until early afternoon on the 26th. In addition to traffic hazards, power cuts are to be expected.

Some industries may reap some positives out of this include cable companies (such as those owned by Neo Industrial (HSE: NEO1V)), which can expect the trend to move electric cables underground to gain speed and pulp & paper companies, which have reported sluggish timber sales and will now have plenty of timber available, although usually they do not make large economic gains from storm-felled trees.

***MONDAY MORNING UPDATE***

Dagmar has caused major damage in Norway. Maximum gusts measured were 55.8 M/s (over 200 km/h, strong category 3 hurricane strength). Plenty of property damages are being reported and tanker BW Thames was in big trouble. Dagmar appears to be among the five worst hurricanes in the last 30 years to strike Norway. Early estimates of damages are in hundreds of millions as situation is now becoming clear. So far no casualties have been reported. 170 000 people are without electricity in Sweden and over 70 000 Fortum (OMX: FUM1V) and 30 000 Vattenfall customers are blacked out in Finland with worst yet to come there.


***MONDAY AFTERNOON UPDATE***

Travel is still severely affected in Norway, Sweden and Finland as trees have fallen on roads. Officials are recommending people to delay driving back from Christmas holidays if possible. Hundreds of thousands of people are without electricity. Repairs may take days in some cases. Hurricane force winds were felt in parts of Sweden and even in Finland maximum sustained winds of 28.5 m/s with gusts up to 35 m/s were measured on land. Another, albeit considerably weaker, storm is predicted to follow in Dagmar's wake tomorrow.


***MONDAY EVENING UPDATE***

A new storm has reached Norway, making repair efforts more challenging. There may be plenty of loose objects lying around after Dagmar and they may cause danger when flying around. Insurance claims from Berit, another large storm that only recently struck Norway, are estimated at 275 million NOK by Finance Norway (Finansnæringens Fellesorganisasjon, FNO) and the claims from Dagmar are expected to be higher.

Train travel is still severely affected as trees have damaged overhead electricity lines. Over 100 000 people in Norway, 150 000 people in Sweden and 200 000 people in Finland are currently without electricity. An elderly man died in Finland as a tree fell on top of him. In Finland the storm has been named Tapani.

***WEDNESDAY MORNING UPDATE***


Cato-storm followed Dagmar and caused further damage. Worries of potential landslides in Norway caused further anxiety. Estonia recommended people to store some water, if their water delivery is handled by electric pumps. People living outside residential areas can expect several days without electricity. Tuesday's storm was surprisingly strong particularly in Eastern Finland and in Ostrobothnia with 25 m/s gusts. A lot more people lost electricity as a result. Insurance companies have started to receive a lot of claims. Depending on the coverage of the insurance, even spoiled freezer food may be covered.

The amount of trees felled is so significant, that timber trade will be affected for a lenghty period. For example in South Norrland, Sweden, some forests may have a hard time recovering from the toll. Forestry vehicle companies and outdoor power products companies such as Husqvarna (OMX: HUSQ B), Ponsse( (OMXH:PON1V) and Kesla (OMXH: KELAS) can expect a spike in sales.

As an example from the damages that electricity companies will suffer, nearly 200 000 Fortum customers were without electricity at some point in Finland. If the cuts extend beyond 12 hours, electricity companies needs to compensate in bulk-transfer costs. Fortum did not comment on costs incurred as a result of the storms.

***UPDATE ON JANUARY 5***

Fortum did give an estimate of the damages after all this morning, saying the widespread power outages and grid damages will cost Fortum approximately 35 million in Finland and 10 million in Sweden. Vattenfall estimates 11 million in storm-related losses in Finland, with 5 million out of those as standard compensation to customers for power failures lasting over 12 hours, 1 million for voluntary compensation based on promises to customers for power cuts between 6 and 12 hours and 5 million for power grid repairs.

Federation of Finnish Financial Services estimated based on initial data that insurance companies will be compensating up to 70 million Euros worth of damages from the Christmas storms, with 40% of those costs stemming from damages to forest owners.