Two helicopters, four lifeboats and five coastguard rescue teams are looking for the eight people who were on the Cypriot-registered Cemfjord.
A spokeswoman for the Maritime and Coastguard Agency (MCA) said “every effort” was being made to find them.
The search was sparked after the crew of a passenger ferry raised the alarm when they spotted the upturned hull of the vessel in the Pentland Firth, north of Scotland.
After darkness fell it was called off, although passing vessels were asked to scan the area.
The MCA spokeswoman said: “The search has resumed this morning, with two helicopters, four lifeboats and five coastguard rescue teams. There is no sign of any of the crewmen.
“It is early in the day so we will see how the day progresses, but every effort is under way.”
German shipping company Brise of Hamburg confirmed yesterday that there were eight people on the ship, seven Poles and one Filipino, adding that there had been no distress call.
The 83-metre bulk cement carrier had been bound for Runcorn, Cheshire, on the west coast of the UK.
Shetland Coastguard was alerted by the NorthLink ferry Hrossey which spotted the vessel around 10 miles east of the Pentland Skerries, about 15 miles from Wick.
Passenger Caitlin Ditchfield told BBC News: “We realised we had actually stopped. Looking out the window my sister noticed the hull of this giant ship, sort of out of the ocean.
“We didn’t move for a while from when we saw it. The captain gave an announcement to say they had contacted the coastguard, that we were actually the first to come across this, and they had asked us to start conducting a search for any debris or any lifeboats.”
She said it has been “quite a rough crossing” but added that conditions were “not too bad” when they spotted the overturned vessel.
She added: “Everyone was trying to help with the search, looking out the windows to see what they could see.”
Ms Ditchfield said: “After being there for about an hour the weather conditions did get a lot worse and you could see the storm coming towards us.
“We were there for about two and a half hours. As we left, the weather conditions - it was completely black, dark outside and the weather conditions were quite bad.”
A spokesman for Brise of Hamburg said yesterday that the “crew of eight are missing following a severe accident in the Pentland Firth, off the north of Scotland” on Friday January 2”.
The statement said: “The crew consists of seven Polish seafarers and one Filipino mariner. The company is in the process of informing the families.”
An MCA statement said: “The search has begun again this morning for eight crew missing from the cement carrier Cemfjord, which capsized and sank in the Pentland Firth.
“The two helicopters and four lifeboats have resumed their search and will be joined by coastguard rescue teams from Kirkwall, St Margaret’s Hope, Duncansby, Scrabster and Wick. HMS Somerset and her helicopter have also joined the search.
“The search has been ongoing since 2.30pm yesterday afternoon when the vessel was found capsized by a passing ferry. Sadly no sign has yet been found of the missing crew.”