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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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- Marubeni Corporation - India
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- Siam City Cement PLC, Thailand
- MS Steel International - UAE
- Manunggal Multi Energi - Indonesia
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- Xindia Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Tamil Nadu electricity Board
- Global Business Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Borneo Indobara - Indonesia
- Australian Coal Association
- San Jose City I Power Corp, Philippines
- Minerals Council of Australia
- Tata Chemicals Ltd - India
- The University of Queensland
- Ceylon Electricity Board - Sri Lanka
- Ministry of Mines - Canada
- Bayan Resources Tbk. - Indonesia
- GN Power Mariveles Coal Plant, Philippines
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- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- European Bulk Services B.V. - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
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- Pipit Mutiara Jaya. PT, Indonesia
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- Formosa Plastics Group - Taiwan
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- ICICI Bank Limited - India
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Altura Mining Limited, Indonesia
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- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Africa Commodities Group - South Africa
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- Directorate Of Revenue Intelligence - India
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- Asmin Koalindo Tuhup - Indonesia
- New Zealand Coal & Carbon
- Merrill Lynch Commodities Europe
- The Treasury - Australian Government
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- Edison Trading Spa - Italy
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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- Heidelberg Cement - Germany
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- Maheswari Brothers Coal Limited - India
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- Thai Mozambique Logistica
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- Sakthi Sugars Limited - India
- Jindal Steel & Power Ltd - India
- Power Finance Corporation Ltd., India
- Aditya Birla Group - India
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- Ministry of Transport, Egypt
- Riau Bara Harum - Indonesia
- Kobexindo Tractors - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Coalindo Energy - Indonesia
- McConnell Dowell - Australia
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- CIMB Investment Bank - Malaysia
- Ind-Barath Power Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- Oldendorff Carriers - Singapore
- PNOC Exploration Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Singapore Mercantile Exchange
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Vijayanagar Sugar Pvt Ltd - India
- Orica Australia Pty. Ltd.
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- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- London Commodity Brokers - England
- Iligan Light & Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Commonwealth Bank - Australia
- Antam Resourcindo - Indonesia
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- Samtan Co., Ltd - South Korea
- Sindya Power Generating Company Private Ltd
- Indian Energy Exchange, India
- Kohat Cement Company Ltd. - Pakistan
- Energy Development Corp, Philippines
- Mercuria Energy - Indonesia
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- Eastern Energy - Thailand
- Renaissance Capital - South Africa
- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indonesian Coal Mining Association
- Billiton Holdings Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- Baramulti Group, Indonesia
- Cigading International Bulk Terminal - Indonesia
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- Aboitiz Power Corporation - Philippines
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Bukit Makmur.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- Planning Commission, India
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- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Alfred C Toepfer International GmbH - Germany
- Bhushan Steel Limited - India
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Videocon Industries ltd - India
- Coal and Oil Company - UAE
- Globalindo Alam Lestari - Indonesia
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- Coastal Gujarat Power Limited - India
- Chamber of Mines of South Africa
- Bangladesh Power Developement Board
- Timah Investasi Mineral - Indoneisa
- Thiess Contractors Indonesia
- Intertek Mineral Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- GAC Shipping (India) Pvt Ltd
- PowerSource Philippines DevCo
- Deloitte Consulting - India
- GVK Power & Infra Limited - India
- Medco Energi Mining Internasional
- Parliament of New Zealand
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- Offshore Bulk Terminal Pte Ltd, Singapore
- SMC Global Power, Philippines
- ASAPP Information Group - India
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- Independent Power Producers Association of India
- Wilmar Investment Holdings
- Electricity Generating Authority of Thailand
- Sojitz Corporation - Japan
- Gujarat Mineral Development Corp Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- Bhoruka Overseas - Indonesia
- Savvy Resources Ltd - HongKong
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Finance - Indonesia
- Trasteel International SA, Italy
- India Bulls Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
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- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Parry Sugars Refinery, India
- Australian Commodity Traders Exchange
- Energy Link Ltd, New Zealand
- Electricity Authority, New Zealand
- CNBM International Corporation - China
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