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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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Thursday, 24 December 09
DRY BULK CHARTERING - SHIPPING UPDATE
Handy
Continued firm conditions for the Handymax / Supramax market in the Atlantic despite the BSI´s downward trend. As chrs scramble to cov ...
Thursday, 24 December 09
EUROSEAS LTD. ANNOUNCES TWO-YEAR TIME CHARTER AGREEMENT FOR PANAMAX BULK CARRIER
Euroseas Ltd., an owner and operator of drybulk carriers and container vessels and provider of seaborne transportation for dry bulk and containerize ...
Wednesday, 23 December 09
INDONESIA POWER CHIEF TO BUILD PLANTS OUTSIDE JAVA
Indonesia's state electricity firm plans to build new power plants outside Java island with a combined capacity of around 2,000 megawatts to resolv ...
Wednesday, 23 December 09
BUKIT ASAM SEES CHINA COAL DEMAND BOOST
* Rebound in prices to have pushed up 2009 revs
* To more than double Tarahan port capacity
Reuters reported that, Indonesian state-owned coal m ...
Wednesday, 23 December 09
MACARTHUR COAL OFFERS TO BUY RIVAL GLOUCESTER
Queensland-based Macarthur Coal will offer to buy fellow Australian Gloucester Coal, in a move to add two new mines and increase coal resources.
...
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- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- Miang Besar Coal Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- Parliament of New Zealand
- Bharathi Cement Corporation - India
- San Jose City I Power Corp, Philippines
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- Mjunction Services Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Iligan Light & Power Inc, Philippines
- Indika Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Larsen & Toubro Limited - India
- Bhoruka Overseas - Indonesia
- Ind-Barath Power Infra Limited - India
- Xindia Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Borneo Indobara - Indonesia
- Ministry of Transport, Egypt
- Central Electricity Authority - India
- Australian Commodity Traders Exchange
- Bulk Trading Sa - Switzerland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kumho Petrochemical, South Korea
- Medco Energi Mining Internasional
- Lanco Infratech Ltd - India
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- Ministry of Finance - Indonesia
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- Trasteel International SA, Italy
- Marubeni Corporation - India
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- Gujarat Sidhee Cement - India
- Energy Development Corp, Philippines
- CNBM International Corporation - China
- ASAPP Information Group - India
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Romanian Commodities Exchange
- Indonesian Coal Mining Association
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- Kalimantan Lumbung Energi - Indonesia
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- Singapore Mercantile Exchange
- Eastern Energy - Thailand
- IHS Mccloskey Coal Group - USA
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jorong Barutama Greston.PT - Indonesia
- Wood Mackenzie - Singapore
- Georgia Ports Authority, United States
- Power Finance Corporation Ltd., India
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- Tata Chemicals Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Riau Bara Harum - Indonesia
- VISA Power Limited - India
- European Bulk Services B.V. - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- Standard Chartered Bank - UAE
- Thai Mozambique Logistica
- GN Power Mariveles Coal Plant, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- Coastal Gujarat Power Limited - India
- MS Steel International - UAE
- Ministry of Mines - Canada
- Altura Mining Limited, Indonesia
- Agrawal Coal Company - India
- PetroVietnam Power Coal Import and Supply Company
- Africa Commodities Group - South Africa
- Timah Investasi Mineral - Indoneisa
- Kideco Jaya Agung - Indonesia
- Mercator Lines Limited - India
- CIMB Investment Bank - Malaysia
- Sarangani Energy Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Indo Tambangraya Megah - Indonesia
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- Independent Power Producers Association of India
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- The University of Queensland
- Indian Energy Exchange, India
- Vijayanagar Sugar Pvt Ltd - India
- Coal and Oil Company - UAE
- Metalloyd Limited - United Kingdom
- Attock Cement Pakistan Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Chamber of Mines of South Africa
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Deloitte Consulting - India
- Bangladesh Power Developement Board
- Krishnapatnam Port Company Ltd. - India
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Electricity Authority, New Zealand
- PTC India Limited - India
- New Zealand Coal & Carbon
- Minerals Council of Australia
- Sindya Power Generating Company Private Ltd
- Parry Sugars Refinery, India
- Global Coal Blending Company Limited - Australia
- ICICI Bank Limited - India
- SMG Consultants - Indonesia
- Siam City Cement PLC, Thailand
- White Energy Company Limited
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Grasim Industreis Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- London Commodity Brokers - England
- Coalindo Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Anglo American - United Kingdom
- Bhatia International Limited - India
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PNOC Exploration Corporation - Philippines
- Energy Link Ltd, New Zealand
- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
- India Bulls Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Billiton Holdings Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Heidelberg Cement - Germany
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- Semirara Mining Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Simpson Spence & Young - Indonesia
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- TeaM Sual Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- Australian Coal Association
- Aditya Birla Group - India
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Eastern Coal Council - USA
- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
- Bukit Baiduri Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- Petron Corporation, Philippines
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- Vedanta Resources Plc - India
- Vizag Seaport Private Limited - India
- Port Waratah Coal Services - Australia
- Uttam Galva Steels Limited - India
- The State Trading Corporation of India Ltd
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- GAC Shipping (India) Pvt Ltd
- Directorate Of Revenue Intelligence - India
- Economic Council, Georgia
- Jindal Steel & Power Ltd - India
- Binh Thuan Hamico - Vietnam
- The Treasury - Australian Government
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
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