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Monday, 07 December 09
DRY BULK RATES' VOLATILITY TO STAY, BUT RECOVERY IS UNDERWAY SAYS ION VAROUXAKIS HEAD OF FREESEAS
 In an interview with Hellenic Shipping News, Mr. Ion G. Varouxakis, Chairman of the Board, President and CEO of Nasdaq-listed Freeseas, explains why dry bulk rates will recover gradually, while volatility will remain. He states that the handysize sector appears to be the healthiest sector right now, mainly because of the low orderbook and the high number of older handies scrapped this year. Mr. Varouxakis founded Free Bulkers, the beginning of a single-vessel, self-financed entrepreneurial venture that led to FreeSeas’ founding and Nasdaq listing in 2005.
Under Mr. Varouxakis’ leadership, FreeSeas has grown to be a leader in the Handysize and Handymax segment in the U.S. capital market. Prior to founding Free Bulkers, Mr. Varouxakis held since 1997 management positions in private shipping companies operating in the drybulk sector.
Lately we witnessed yet another rally of the BDI this year. With the market retreating again, do you think that this erratic behaviour will continue next year as well?
As the world economy rebounds we expect that the charter rates will gradually recover. Seasonality and volatility will continue. For the time being though, the charter rates stand at relatively healthy levels.
What factors are causing this turbulence of dry bulk rates?
The effective removal of trade credit and virtual stand-still of industrial production on a worldwide basis have been the contributing factors for the collapse of the charter rates. As restocking starts taking place the rates will recover. However the recovery is not and will not be uniform and there will be pockets of weakness which will lead to the volatility of the rates.
Do you think that the looming oversupply of vessels will soon become a reality, or is there any room for that to change?
We have seen a very substantial number of cancellations and delays in the deliveries. As a consequence we expect that while the annual rate of newbuilding deliveries will be at record high levels in the next couple of years, they in fact will be spread over a longer period of time, leading to about 20-30 % more newbuilding deliveries than in 2007. This is probably a scenario much better than most fear, but still of concern. It is interesting to note that not all sectors are overbuilt. For instance, the handysize sector we operate in has by far the lowest orderbook (in fact at rather healthy levels), coupled with an overage fleet of handies which should provide support for the future.
As a matter of fact there has been massive scrapping of handysize vessels over the last year.
How does Freeseas cope with current market conditions?
We are operating a profitable and cash flow-positive business under adverse market conditions, and expect to be able to continue to do so under the present conditions.
What measures did you implement in order to improve the company’s performance?
We have taken cost-cutting initiatives, which increased our margins, and decided to operate our vessels coming off-charter in the spot market in order to be able to benefit from improving market conditions.
How would you characterize the current market for second hand vessels?
There is a lot of liquidity and sales in the second hand market, and one could say relatively stable prices. While prices have increased since the beginning of 2009, the volatility of second hand prices is far smaller that the volatility of charter rates. We believe that the scarcity of credit contributes to this situation.
Why have the Chinese been so aggressive this year, leaving Hellenic ship owners at second place?
An explanation could be that there is an intention by authorities (which could soon become a law), under which, ship owners won’t be allowed to fly the Chinese Flag in vessels older than 10 years old in the future. This could a reason, why many owners from China are buying a large number of older second hand bulk carriers from the beginning of the year, as a reaction to such a possibility.
Do you think that second hand ships’ prices will go down again, or are we heading towards firmer prices?
Nobody can predict the future. However we believe that prices will remain relatively stable for a while and will improve only for a sustainable improvement in the charter rates, and release of acquisition credit in the market.
With 2010 just a few weeks away, what are your expectations about next year? How do you think things are shaping up for the dry bulk industry?
I am optimistic for the future. Shipping is a centuries-old industry with its own self-correcting mechanism. We are in the process of the correction, the duration of which is unknown, yet will provide the opportunities for healthy companies to expand.
Recently, there’s been a lot of debate among industry players, regarding the abolition of the Ministry of Mercantile Marine. Do you think it will be the beginning of a series of changes for the way shipping is treated in Hellas, or will we see some positive initiatives, for instance towards the creation of a proper maritime cluster of services?
Bureaucracy, a chronic problem in Greece, is the main enemy for the integration of a modern maritime cluster of services (as you call it).
In our business in which every hour is worth thousands of dollars, there is no room for bureaucracy and the uncertainty it generates, even worse there is no room for ‘client-relations’ with the state.
No government in Greece has so far been able to overcome the public service bureaucracy and implement ground-breaking changes, allowing the development of Greek-based maritime services or providing the appropriate incentives to fly the Greek flag. Let’s see what the future has in task for us.
Source: Nikos Roussanoglou, Hellenic Shipping News Worldwide
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Wednesday, 30 December 09
CHINA'S 2010 COAL DEMAND COULD RISE 4%-6%, ACCORDING TO CHINA SECURITIES JOURNAL
China, which is the world’s second-largest energy user, may consume between 4 and 6% more coal next year on continued economic growth, China S ...
Tuesday, 29 December 09
PROFIT IN COAL INDUSTRY DOWN 9.4% Y-O-Y IN JAN.- NOV.
In November, China's coal production was 289mln tons, up 26.3% year on year, an increase of 5.2% over last month. China's average daily trucks loa ...
Tuesday, 29 December 09
DHARMA HENWA EYES 20% REVENUE GROWTH
Local integrated mining services provider PT Dharma Henwa, which was earlier this year acquired by coal mining giant PT Bumi Resources, expects reve ...
Monday, 28 December 09
NEED TO IMPORT COAL COMES EARLY
Viet Nam may need to start importing coal as early as 2012, three years earlier than expected, to meet its electricity demands.
The Viet Nam Coal ...
Monday, 28 December 09
GOVT EYES $3.57B MINING, GEOTHERMAL INVESTMENT
The country can expect up to US$3.57 billion in investment in mining and geothermal energy next year, which would represent an increase by more than ...
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- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Central Electricity Authority - India
- Orica Mining Services - Indonesia
- Banpu Public Company Limited - Thailand
- Coastal Gujarat Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- Vedanta Resources Plc - India
- Attock Cement Pakistan Limited
- Sinarmas Energy and Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Tata Chemicals Ltd - India
- PTC India Limited - India
- Grasim Industreis Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Eastern Coal Council - USA
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercuria Energy - Indonesia
- Cement Manufacturers Association - India
- International Coal Ventures Pvt Ltd - India
- Indonesian Coal Mining Association
- Neyveli Lignite Corporation Ltd, - India
- Maharashtra Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- Eastern Energy - Thailand
- Bhatia International Limited - India
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Bukit Makmur.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- San Jose City I Power Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- Price Waterhouse Coopers - Russia
- MS Steel International - UAE
- Agrawal Coal Company - India
- ASAPP Information Group - India
- Wood Mackenzie - Singapore
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement - Thailand
- Parry Sugars Refinery, India
- Heidelberg Cement - Germany
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- Planning Commission, India
- Bangladesh Power Developement Board
- Sical Logistics Limited - India
- Merrill Lynch Commodities Europe
- Bukit Asam (Persero) Tbk - Indonesia
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- Timah Investasi Mineral - Indoneisa
- Bhushan Steel Limited - India
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Independent Power Producers Association of India
- Kobexindo Tractors - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Samtan Co., Ltd - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bulk Trading Sa - Switzerland
- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- Makarim & Taira - Indonesia
- SMC Global Power, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Star Paper Mills Limited - India
- Edison Trading Spa - Italy
- Intertek Mineral Services - Indonesia
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- Aditya Birla Group - India
- GVK Power & Infra Limited - India
- Straits Asia Resources Limited - Singapore
- PNOC Exploration Corporation - Philippines
- Australian Coal Association
- Romanian Commodities Exchange
- Indian Oil Corporation Limited
- Karbindo Abesyapradhi - Indoneisa
- Global Business Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Chettinad Cement Corporation Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- Global Coal Blending Company Limited - Australia
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Formosa Plastics Group - Taiwan
- Rio Tinto Coal - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- SN Aboitiz Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- The State Trading Corporation of India Ltd
- ICICI Bank Limited - India
- Economic Council, Georgia
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Kaltim Prima Coal - Indonesia
- Borneo Indobara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Simpson Spence & Young - Indonesia
- Meenaskhi Energy Private Limited - India
- Mjunction Services Limited - India
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Manunggal Multi Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Globalindo Alam Lestari - Indonesia
- Trasteel International SA, Italy
- GMR Energy Limited - India
- Goldman Sachs - Singapore
- Mercator Lines Limited - India
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Indika Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Energy Development Corp, Philippines
- Deloitte Consulting - India
- Kalimantan Lumbung Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- Gujarat Sidhee Cement - India
- Aboitiz Power Corporation - Philippines
- Commonwealth Bank - Australia
- Thai Mozambique Logistica
- Central Java Power - Indonesia
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Coalindo Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement PLC, Thailand
- Carbofer General Trading SA - India
- Georgia Ports Authority, United States
- Larsen & Toubro Limited - India
- Semirara Mining Corp, Philippines
- London Commodity Brokers - England
- Anglo American - United Kingdom
- Medco Energi Mining Internasional
- Ambuja Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Australian Commodity Traders Exchange
- Kapuas Tunggal Persada - Indonesia
- Singapore Mercantile Exchange
- New Zealand Coal & Carbon
- Marubeni Corporation - India
- Minerals Council of Australia
- Sakthi Sugars Limited - India
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Salva Resources Pvt Ltd - India
- VISA Power Limited - India
- Global Green Power PLC Corporation, Philippines
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