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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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Friday, 18 December 09
COKING COAL SHORTAGE IN CHINA TO SPUR DEMAND FIGHT WITH JAPAN
China, the world’s largest steelmaker, faces a shortage of coking coal that may drive imports next year and spur a fight for resources with Ja ...
Thursday, 17 December 09
THE 6TH CLEAN ENERGY FORUM - CLEAN COAL 2010
COALspot.com (China) - Press Release: The 6th Clean Energy Forum--Clean Coal 2010 January 27-29, 2010 Renaissance Tianjin Teda Hotel And Conven ...
Thursday, 17 December 09
JFE STEEL INVESTS $555 MILLION IN AUSTRALIA COAL MINE
JFE Steel Corp., Japan’s second- largest producer, will invest 50 billion yen ($555 million) in a coal mine in Queensland, Australia, includin ...
Thursday, 17 December 09
CHINA, INDIA DEMAND MAY BOOST THERMAL COAL PRICE, JPMORGAN SAYS
Demand for thermal coal from China and India may boost prices of the fuel to $80 a metric ton next year amid reduced supplies and lower inventories, ...
Thursday, 17 December 09
RBCT PROBLEMS TO CAUSE STEAM COAL PRICE SPIKE IN Q1
Bugs in the new computer system at South Africa's Richards Bay Coal Terminal and persistent rail problems will make it impossible for exporters to ...
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- Krishnapatnam Port Company Ltd. - India
- Bayan Resources Tbk. - Indonesia
- SMG Consultants - Indonesia
- Bangladesh Power Developement Board
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
- Ministry of Mines - Canada
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- Kartika Selabumi Mining - Indonesia
- Mercuria Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Coal and Oil Company - UAE
- Jorong Barutama Greston.PT - Indonesia
- Coalindo Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Central Java Power - Indonesia
- Coastal Gujarat Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kepco SPC Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Mercator Lines Limited - India
- Sarangani Energy Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- GVK Power & Infra Limited - India
- Energy Link Ltd, New Zealand
- Heidelberg Cement - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The University of Queensland
- Formosa Plastics Group - Taiwan
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhushan Steel Limited - India
- Cement Manufacturers Association - India
- Vizag Seaport Private Limited - India
- Energy Development Corp, Philippines
- Marubeni Corporation - India
- Medco Energi Mining Internasional
- Parliament of New Zealand
- Africa Commodities Group - South Africa
- European Bulk Services B.V. - Netherlands
- Gujarat Sidhee Cement - India
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- PetroVietnam Power Coal Import and Supply Company
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- CNBM International Corporation - China
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Commonwealth Bank - Australia
- Orica Australia Pty. Ltd.
- Global Green Power PLC Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Kideco Jaya Agung - Indonesia
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Siam City Cement PLC, Thailand
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Directorate Of Revenue Intelligence - India
- Minerals Council of Australia
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- Ind-Barath Power Infra Limited - India
- Agrawal Coal Company - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Mining Services - Indonesia
- Indogreen Group - Indonesia
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- Vedanta Resources Plc - India
- Electricity Generating Authority of Thailand
- Bharathi Cement Corporation - India
- Chettinad Cement Corporation Ltd - India
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- Thai Mozambique Logistica
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Videocon Industries ltd - India
- Binh Thuan Hamico - Vietnam
- Metalloyd Limited - United Kingdom
- Indika Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- GMR Energy Limited - India
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- New Zealand Coal & Carbon
- Trasteel International SA, Italy
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asmin Koalindo Tuhup - Indonesia
- Bhoruka Overseas - Indonesia
- Kumho Petrochemical, South Korea
- Barasentosa Lestari - Indonesia
- Edison Trading Spa - Italy
- India Bulls Power Limited - India
- Singapore Mercantile Exchange
- MS Steel International - UAE
- Anglo American - United Kingdom
- Global Business Power Corporation, Philippines
- Georgia Ports Authority, United States
- Holcim Trading Pte Ltd - Singapore
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- Kalimantan Lumbung Energi - Indonesia
- Wilmar Investment Holdings
- Posco Energy - South Korea
- London Commodity Brokers - England
- Price Waterhouse Coopers - Russia
- Larsen & Toubro Limited - India
- PTC India Limited - India
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- Latin American Coal - Colombia
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Bulk Trading Sa - Switzerland
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- Ministry of Transport, Egypt
- Directorate General of MIneral and Coal - Indonesia
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- ASAPP Information Group - India
- Maharashtra Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Electricity Authority, New Zealand
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- Bhatia International Limited - India
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- Kobexindo Tractors - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- Planning Commission, India
- Jindal Steel & Power Ltd - India
- Indo Tambangraya Megah - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Oldendorff Carriers - Singapore
- ICICI Bank Limited - India
- Maheswari Brothers Coal Limited - India
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- CIMB Investment Bank - Malaysia
- Uttam Galva Steels Limited - India
- IEA Clean Coal Centre - UK
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- Independent Power Producers Association of India
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Petron Corporation, Philippines
- White Energy Company Limited
- Attock Cement Pakistan Limited
- Simpson Spence & Young - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- VISA Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- Aboitiz Power Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Sakthi Sugars Limited - India
- Xindia Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- Semirara Mining and Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Renaissance Capital - South Africa
- Borneo Indobara - Indonesia
- Straits Asia Resources Limited - Singapore
- Semirara Mining Corp, Philippines
- McConnell Dowell - Australia
- Eastern Coal Council - USA
- Standard Chartered Bank - UAE
- Star Paper Mills Limited - India
- Rashtriya Ispat Nigam Limited - India
- Ambuja Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rio Tinto Coal - Australia
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- Intertek Mineral Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- PNOC Exploration Corporation - Philippines
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