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Monday, 17 December 12
SHIP PRICES TO BOTTOM OUT IN 2013 SAYS GEORGE D. GOURDOMICHALIS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 Ship values especially in older tonnage, or even modern vessels with poor quality are expected to fall further during 2013, with the market as a whole predicted to bottom-out next year, creating the ground for a rebound later on. In an exclusive interview with Hellenic Shipping News Worldwide, Mr. George D. Gourdomichalis, Managing Director of G. Bros Maritime S.A. talks about the dry bulk market's potential in 2013, which ship types appear to have the best value-for-money and debates the effectiveness of the new breed of "Eco-Carriers".
The Gourdomichalis family commenced their own shipowning activities in the London shipping market in 1950's. Since then have enjoyed a very high reputation in the shipping industry. Members of the family have kept high positions in various Boards of Directors and other Official Organizations such as being President of the Union of Greek Shipowners. In 1974 the firm's offices moved to Piraeus, Hellas while still maintaining a presence in London. Since 1990, the family's involvement in shipping has also included a joint venture with the Romanian State Company (Petromin). The Gourdomichalis brothers first independent foray into shipowning and shipmanagement activities was with the family sponsored Joint Venture with the Russian State owned Baltic Shipping Co. which operated under the flag of Baltmed Shipping Co.
In 1996, after having wound up Baltmed Shipping Co., the J.V. with Baltic Shipping Co., George and Stathis Gourdomichalis established Gourdomichalis Naftiki Eteria S.A. The establishment of the company manifested the younger generation's strong drive to succeed using its own means and skills. Since its inception in 1996 it has managed a total of six dry cargo ships including Freedom and Handy type vessels. The company has also managed a repossessed vessel on behalf of a bank.
In 2004 all their activities were consolidated into a holding company FREESEAS INC. and managed by Free Bulkers S.A. Freeseas Inc was listed on NASDAQ on December 2005. George Gourdomichalis held the position of President and Chairman and Stathis Gourdomichalis was the Treasurer and Chief Financial Officer. The two principals controlled about 48% of the listed company. In January 2007 they sold their shareholding in both Freeseas Inc. and Free Bulkers S.A. to entities controlled by the Restis group.
This development allowed George and Stathis to once again grow their "private - family" shipping activities. A new structure was put into operation under the name G Bros Maritime S.A. They employ a total of sixteen shore-based staff including a Port Captain, Engineer Superintendent, Accountants, Secretarial and Administrative Executive staff. The company occupies approximately 300 sq. meters of office space in prime area on Akti Miaouli, Piraeus, at the heart of the worlds largest shipping center.
This year's performance of the dry bulk market has been less than memorable, in fact quite the opposite. Why did this happen, especially after a satisfying 2011, at least in terms of freight rates?
The softness of the dry bulk market is clearly a function of the imbalance of tonnage supply and demand, world GDP growth slowdown experienced over the past couple of years and the lack of finance. We fail to see any satisfaction in 2011 in freight rates and values and would suggest that the dry bulk market downturn we are experiencing essentially since end 2008, with a short breather in the spring of 2010, is a prolonged down run of the market.
Do you expect 2013 to be just as challenging, or could conditions improve, as a result of an improvement of the supply/demand current imbalance, a product of heavy new building ordering of the past few years?
As stated above there are three basic reasons pressuring freight rates and values down, whereas the supply/demand balance is slowly starting to look better, there is still significant danger of continued oversupply of tonnage on the back of the very strong marketing of the supposedly “eco-ships” by yards lacking utilization. The coming year will be as challenging as 2012, but will also see the market bottom out thus creating the opportunity for purchases and positioning for a upturn.
What strategy did your company follow, in order to cope with these adverse market conditions?
We, as many others, restructured our fleet by retiring older tonnage and restructuring financial arrangements, as well as disposing of vessels with heavier than acceptable debt. In reality, we exercised a stop-loss strategy allowing us to weather the down market.
Do you thinks that ships' values are close to bottoming-out, or is there still room for lower prices?
Vessel values are a function of earnings and replacement value and as such there are certain segments and age groups that may have further down side with overage tonnage in the larger sizes being the most prominent in that group. Having said that, older tonnage across the board has further downside as it is trading at scrap related values. We also believe that younger tonnage of questionable and inferior quality has considerable down side, being that in a buyer’s market one tends to cherry pick the best of the candidates.
Which ship types do you find the most attractive in today's market?
The answer depends on the driver behind purchases, i.e. is it a speculative asset play, or an operational longer term investment? In the case of the first, we would be inclined to look at the very large modern units, whereas in the case of the latter we would look at the modern high quality/high spec handy and handy-max segment.
Do you prefer newbuilding investments, or is it better to look for modern second hand tonnage in today's market environment?
We believe that quality of design and build is paramount these days and as such would rule out any new-building activity at inferior yards. Having said that, the discount to replacement cost found in today’s market leads us to believe that very attractive valuations can be found in top quality modern second hand vessels.
How different are today's conditions in shipping finance, compared to the pre-2009 period? Is it challenging to obtain financing for new vessel acquisitions?
Immensely!! There is practically no finance available except from very select institutions to very select borrowers either by virtue of being existing clients and/or by virtue of paying down existing facilities and thus opening up credit and to the larger corporate entities who are borrowing both on the strength of their balance sheets but also on the strength of their cash flows and cash in hand. Naturally, there are certain segments that are faring better than other in obtaining finance such as the LNG and offshore industries as well as the re-appearance of quasi financial institutions providing higher cost finance. In all though, margins are up, loan to value ratios are down and security is paramount to lenders.
Do you believe that the latest trend of the so-called "Eco Carriers", i.e. ships which promise lower fuel consumption will become dominant in the future, despite the premium prices they command? Are you considering investing in such vessels in the future?
The response of any educated and experienced shipping man is that the plethora of “eco-carrier” designs are untested and make claims that have not yet been put to the test and rigors of the real sea. A properly designed, maintained and operated existing ship can provide good competition to any of the new designs and we believe it is best to reserve judgment till these designs are put to the test.
One of the major concerns of the global shipping industry has also been piracy in various areas around the world. How do you protect your vessels? Which is the best solution in your opinion?
We, as others, have been forced to employ armed guards onboard our vessels transiting/trading in high risk areas. It is not a solution to the problem but is a necessary evil. The solution lies in the geopolitical balances that need to be juggled in Somalia and/or in West Africa and/or S.E. Asia. We hope, primarily for the safety of our crews and the free flow of trade that a final solution both on shore and at sea is found the soonest possible.
Source : Nikos Roussanoglou, Hellenic Shipping News Worldwide
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Tuesday, 18 December 12
NEWCASTLE PORT IN AUSTRALIA SHIPPED 20.19 PERCENT MORE COAL W/E 17 DECEMBER 2012
COALspot.com - Newcastle port in Australia has loaded 3,269,640 MT of thermal and coking coal for week ended 0700 hours 17 December 2012, Newc ...
Monday, 17 December 12
SYNERGISING WITH PIONEERS TO DEVELOP TOMORROW'S LATIN AMERICAN RAILWAYS
Press Release: Brazil being one of the largest country in South America has one of the most dynamic rail markets in the world. Rail transport in Bra ...
Sunday, 16 December 12
FREIGHT TREND SOFTENED THIS WEEK - VISTAAR
COALspot.com - The freight market further softened this week and closed at 784 points (down by 18.84 pct). The cape index had the biggest fall ...
Friday, 14 December 12
GMR GROUP OF INDIA TO IMPORT 100K MT OF 4800 GAR COAL
COALspot.com: GMR Group of India to invite bids for 100,000 Metric Tons of imported non coking coal to be delivered during January and February 2013 ...
Thursday, 13 December 12
HANDY : WCI-CHINA RATES AROUND $ 6000 AND ECI-CHINA AROUND $ 4000 - FEARNLEYS
Handy
Atlantic market remained unchanged. Rates from USG to Feast were around USD 18k and Black Sea to Feast about USD 10k. USG-Skaw-Passero rates ...
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- Formosa Plastics Group - Taiwan
- Sarangani Energy Corporation, Philippines
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- South Luzon Thermal Energy Corporation
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Meralco Power Generation, Philippines
- Australian Commodity Traders Exchange
- Krishnapatnam Port Company Ltd. - India
- Eastern Energy - Thailand
- Jaiprakash Power Ventures ltd
- Kobexindo Tractors - Indoneisa
- Orica Australia Pty. Ltd.
- Larsen & Toubro Limited - India
- Jindal Steel & Power Ltd - India
- Directorate Of Revenue Intelligence - India
- Electricity Generating Authority of Thailand
- Merrill Lynch Commodities Europe
- Maheswari Brothers Coal Limited - India
- Ind-Barath Power Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Manunggal Multi Energi - Indonesia
- London Commodity Brokers - England
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- GVK Power & Infra Limited - India
- SMC Global Power, Philippines
- Interocean Group of Companies - India
- Posco Energy - South Korea
- White Energy Company Limited
- Maharashtra Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Chamber of Mines of South Africa
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Bukit Makmur.PT - Indonesia
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kohat Cement Company Ltd. - Pakistan
- GAC Shipping (India) Pvt Ltd
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- Edison Trading Spa - Italy
- Essar Steel Hazira Ltd - India
- Simpson Spence & Young - Indonesia
- Australian Coal Association
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Timah Investasi Mineral - Indoneisa
- PNOC Exploration Corporation - Philippines
- Medco Energi Mining Internasional
- AsiaOL BioFuels Corp., Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- Bukit Baiduri Energy - Indonesia
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- Carbofer General Trading SA - India
- CNBM International Corporation - China
- Leighton Contractors Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- PowerSource Philippines DevCo
- Neyveli Lignite Corporation Ltd, - India
- Agrawal Coal Company - India
- Renaissance Capital - South Africa
- Power Finance Corporation Ltd., India
- International Coal Ventures Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Mines - Canada
- Coal and Oil Company - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Wilmar Investment Holdings
- TeaM Sual Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Mjunction Services Limited - India
- Rio Tinto Coal - Australia
- Kalimantan Lumbung Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- San Jose City I Power Corp, Philippines
- Deloitte Consulting - India
- Planning Commission, India
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
- The Treasury - Australian Government
- Parliament of New Zealand
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- Mercuria Energy - Indonesia
- Bhatia International Limited - India
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- Coastal Gujarat Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Oldendorff Carriers - Singapore
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- SN Aboitiz Power Inc, Philippines
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Globalindo Alam Lestari - Indonesia
- Sical Logistics Limited - India
- Baramulti Group, Indonesia
- Antam Resourcindo - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kideco Jaya Agung - Indonesia
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- VISA Power Limited - India
- Aboitiz Power Corporation - Philippines
- Indian Energy Exchange, India
- Altura Mining Limited, Indonesia
- Electricity Authority, New Zealand
- Georgia Ports Authority, United States
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Transport, Egypt
- Bayan Resources Tbk. - Indonesia
- Romanian Commodities Exchange
- Independent Power Producers Association of India
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Marubeni Corporation - India
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Vedanta Resources Plc - India
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- OPG Power Generation Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- The University of Queensland
- Indogreen Group - Indonesia
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- Bangladesh Power Developement Board
- Indika Energy - Indonesia
- PTC India Limited - India
- Videocon Industries ltd - India
- GMR Energy Limited - India
- Miang Besar Coal Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Central Java Power - Indonesia
- Therma Luzon, Inc, Philippines
- Lanco Infratech Ltd - India
- Coalindo Energy - Indonesia
- Aditya Birla Group - India
- Cigading International Bulk Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Gujarat Sidhee Cement - India
- Malabar Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- Sakthi Sugars Limited - India
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Mercator Lines Limited - India
- Energy Development Corp, Philippines
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Vizag Seaport Private Limited - India
- Salva Resources Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Indo Tambangraya Megah - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- MS Steel International - UAE
- Grasim Industreis Ltd - India
- Uttam Galva Steels Limited - India
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- Anglo American - United Kingdom
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