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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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Tuesday, 22 December 09
CHINA CONTRACTED COAL PRICE FOR 2010 SEES SLIGHT INCREASE
A number of coal and power enterprises have concluded their annual power-coal supply contracts for 2010, and the contracted coal price saw slight in ...
Tuesday, 22 December 09
NEWCASTLE COAL SHIP QUEUE LONGEST IN TWO YEARS AS EXPORTS SLOW
Bloomberg reported that, the queue of coal ships waiting at Australia’s Newcastle port, the world’s biggest export harbor for the fuel, ...
Monday, 21 December 09
INDONESIA HAS EXPORTED AROUND 195.303 MILLION TONS OF COAL TILL END OF NOVEMBER 2009
COALspot.com (Indonesia): China has been the largest single buyer of Indonesian coal in November 2009, by taking 28.69% of total exported quan ...
Monday, 21 December 09
RUSSIAN COAL MINER SUEK EYES '10 LONDON IPO
* Company valued at around $8-$9 bln - banking source
* IPO could take place in H1 - source
* May list 25 pct of share capital - report
Reuters ...
Monday, 21 December 09
IGCC OUTLOOK CHINA 2010 TO BE HELD IN APRIL 2010 IN SHANGHAI
COALspot.com (China): Press Release - Aiming at unveiling the growth area of IGCC polygeneration, IGCC Outlook China 2010 is planned to be hel ...
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- Aditya Birla Group - India
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- Port Waratah Coal Services - Australia
- Ministry of Transport, Egypt
- Electricity Authority, New Zealand
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- Kapuas Tunggal Persada - Indonesia
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- CNBM International Corporation - China
- Vizag Seaport Private Limited - India
- Parry Sugars Refinery, India
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- Merrill Lynch Commodities Europe
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- Heidelberg Cement - Germany
- Gujarat Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
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- MS Steel International - UAE
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
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- Agrawal Coal Company - India
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- White Energy Company Limited
- Kepco SPC Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Oldendorff Carriers - Singapore
- New Zealand Coal & Carbon
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- Cigading International Bulk Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Global Coal Blending Company Limited - Australia
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- London Commodity Brokers - England
- Edison Trading Spa - Italy
- Vedanta Resources Plc - India
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- Grasim Industreis Ltd - India
- VISA Power Limited - India
- Sarangani Energy Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
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- AsiaOL BioFuels Corp., Philippines
- Trasteel International SA, Italy
- Semirara Mining and Power Corporation, Philippines
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- Coalindo Energy - Indonesia
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- Singapore Mercantile Exchange
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- Mercuria Energy - Indonesia
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- International Coal Ventures Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Chamber of Mines of South Africa
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- Larsen & Toubro Limited - India
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Bukit Baiduri Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Java Power - Indonesia
- IEA Clean Coal Centre - UK
- Metalloyd Limited - United Kingdom
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Ministry of Mines - Canada
- Rio Tinto Coal - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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- Sindya Power Generating Company Private Ltd
- Cement Manufacturers Association - India
- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Timah Investasi Mineral - Indoneisa
- Ambuja Cements Ltd - India
- Madhucon Powers Ltd - India
- Indian Oil Corporation Limited
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Mjunction Services Limited - India
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- Eastern Energy - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sinarmas Energy and Mining - Indonesia
- SMG Consultants - Indonesia
- Global Business Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Lanco Infratech Ltd - India
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Mintek Dendrill Indonesia
- ASAPP Information Group - India
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Bahari Cakrawala Sebuku - Indonesia
- Kartika Selabumi Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Directorate Of Revenue Intelligence - India
- Kobexindo Tractors - Indoneisa
- Goldman Sachs - Singapore
- Salva Resources Pvt Ltd - India
- The University of Queensland
- Indonesian Coal Mining Association
- Thai Mozambique Logistica
- Bhatia International Limited - India
- Siam City Cement - Thailand
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- Coal and Oil Company - UAE
- Karaikal Port Pvt Ltd - India
- GMR Energy Limited - India
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Bulk Trading Sa - Switzerland
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Sical Logistics Limited - India
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- Tamil Nadu electricity Board
- Simpson Spence & Young - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Indogreen Group - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
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- Bangladesh Power Developement Board
- Maharashtra Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
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- Videocon Industries ltd - India
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- PowerSource Philippines DevCo
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- Standard Chartered Bank - UAE
- Minerals Council of Australia
- India Bulls Power Limited - India
- Samtan Co., Ltd - South Korea
- Commonwealth Bank - Australia
- GN Power Mariveles Coal Plant, Philippines
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