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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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Monday, 28 December 09
INDONESIAN MINER LINKED TO FUGITIVE FINANCIER
The Energy Ministry is unlikely to approve the transfer of ownership of coal miner PT Riau Baraharum on allegations it is indirectly owned by fugiti ...
Monday, 28 December 09
SOMALI PIRATES SAY $4 MILLION RANSOM PAID FOR COAL SHIP
A helicopter dropped a $4 million ransom payment on Sunday on to the deck of a Chinese coal ship hijacked by Somali pirates in mid-October, a pirate ...
Saturday, 26 December 09
COAL INDIA, RIO TINTO MAY HOLD TALKS SOON ON TIE-UP
State owned Coal India Limited (CIL), which is in the race for acquisition of overseas coal properties to plug the demand supply shortfall of the dr ...
Saturday, 26 December 09
COKING COAL PRICES MAY RISE BY 10 - 15% FROM APRIL 2010
The price of coking coal, one of the key raw materials for steel production, is likely to increase by 10-15% in next April, the month in which m ...
Saturday, 26 December 09
COAL INDIA SECURES TWO BLOCKS IN MOZAMBIQUE
It's official now. Mozambique has awarded two coal acreages in its Maotize region with an estimated one billion tonne reserves to Coal India Ltd bu ...
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- Jaiprakash Power Ventures ltd
- SMG Consultants - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Deloitte Consulting - India
- Wood Mackenzie - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Videocon Industries ltd - India
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- Vizag Seaport Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Uttam Galva Steels Limited - India
- ASAPP Information Group - India
- Billiton Holdings Pty Ltd - Australia
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- Simpson Spence & Young - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Antam Resourcindo - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- Siam City Cement PLC, Thailand
- European Bulk Services B.V. - Netherlands
- Cement Manufacturers Association - India
- Planning Commission, India
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- Semirara Mining and Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Makarim & Taira - Indonesia
- Commonwealth Bank - Australia
- Kalimantan Lumbung Energi - Indonesia
- GMR Energy Limited - India
- Sical Logistics Limited - India
- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- Thai Mozambique Logistica
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Tata Chemicals Ltd - India
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Anglo American - United Kingdom
- Meralco Power Generation, Philippines
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
- CNBM International Corporation - China
- PetroVietnam Power Coal Import and Supply Company
- VISA Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Dalmia Cement Bharat India
- The University of Queensland
- Orica Mining Services - Indonesia
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Latin American Coal - Colombia
- Larsen & Toubro Limited - India
- Petron Corporation, Philippines
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- Banpu Public Company Limited - Thailand
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Jindal Steel & Power Ltd - India
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Central Electricity Authority - India
- Africa Commodities Group - South Africa
- White Energy Company Limited
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Mercator Lines Limited - India
- TeaM Sual Corporation - Philippines
- Global Business Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- Indian Energy Exchange, India
- Riau Bara Harum - Indonesia
- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Energy Development Corp, Philippines
- Straits Asia Resources Limited - Singapore
- San Jose City I Power Corp, Philippines
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- Aditya Birla Group - India
- Metalloyd Limited - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Pendopo Energi Batubara - Indonesia
- Renaissance Capital - South Africa
- Singapore Mercantile Exchange
- Oldendorff Carriers - Singapore
- Port Waratah Coal Services - Australia
- Rio Tinto Coal - Australia
- Intertek Mineral Services - Indonesia
- Standard Chartered Bank - UAE
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Minerals Council of Australia
- Economic Council, Georgia
- Borneo Indobara - Indonesia
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- Karaikal Port Pvt Ltd - India
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- Wilmar Investment Holdings
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- Kideco Jaya Agung - Indonesia
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- McConnell Dowell - Australia
- GAC Shipping (India) Pvt Ltd
- Madhucon Powers Ltd - India
- Vedanta Resources Plc - India
- PNOC Exploration Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Ministry of Mines - Canada
- Sojitz Corporation - Japan
- Directorate General of MIneral and Coal - Indonesia
- Indian Oil Corporation Limited
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- Ministry of Finance - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- London Commodity Brokers - England
- OPG Power Generation Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Australian Coal Association
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- Trasteel International SA, Italy
- Asmin Koalindo Tuhup - Indonesia
- Posco Energy - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tamil Nadu electricity Board
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Goldman Sachs - Singapore
- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- Marubeni Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Independent Power Producers Association of India
- GN Power Mariveles Coal Plant, Philippines
- Indo Tambangraya Megah - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Toyota Tsusho Corporation, Japan
- Kumho Petrochemical, South Korea
- Parry Sugars Refinery, India
- CIMB Investment Bank - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement - Thailand
- Directorate Of Revenue Intelligence - India
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- Merrill Lynch Commodities Europe
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- South Luzon Thermal Energy Corporation
- Parliament of New Zealand
- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Sree Jayajothi Cements Limited - India
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- Global Coal Blending Company Limited - Australia
- SN Aboitiz Power Inc, Philippines
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