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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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Wednesday, 16 December 09
COECLERICI EYES SECOND RUSSIA COAL MINE
* CEO says "seriously considering" mid-small size purchase
* Will use mine to increase exports to Asia
* Says delays at ports will not c ...
Wednesday, 16 December 09
INDONESIA'S FIRST PRIVATE RAILWAY TO BOOST RAK'S MINING INTERESTS
MEC infra to invest $1b in construction of 130-km transport link
A 130-kilometre railway that will ease the transport of raw materials and finish ...
Tuesday, 15 December 09
KOMIPO HAS ISSUED A NEW TENDER FOR 30000 MT OF 5200 NAR KCAL/KG COAL
COALspot.com (South Korea): South Korean state-owned utility Korea Midland Power (KOMIPO) has issued an new tender for prompt supply of 30000 M ...
Tuesday, 15 December 09
CHINA CUTS IMPORT DUTIES ON COAL, RAISES FOR OTHERS
China will lower import duties on more than 600 products next year, including coal, naphtha and phosphate ore, the Finance Ministry said on Tuesday. ...
Tuesday, 15 December 09
NTPC'S COAL WOES UNLIKELY TO END SOON
State-owned power producer NTPC’s woes over shortages of coal may not end soon. Though the company is importing 12.5 million tonnes of coal&nb ...
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- Kartika Selabumi Mining - Indonesia
- South Luzon Thermal Energy Corporation
- The University of Queensland
- Deloitte Consulting - India
- Planning Commission, India
- ICICI Bank Limited - India
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- India Bulls Power Limited - India
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- Semirara Mining Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Globalindo Alam Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- Rashtriya Ispat Nigam Limited - India
- Merrill Lynch Commodities Europe
- McConnell Dowell - Australia
- Kohat Cement Company Ltd. - Pakistan
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- Minerals Council of Australia
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- PTC India Limited - India
- Medco Energi Mining Internasional
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- Tata Chemicals Ltd - India
- Agrawal Coal Company - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- VISA Power Limited - India
- Uttam Galva Steels Limited - India
- Meralco Power Generation, Philippines
- Bulk Trading Sa - Switzerland
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Edison Trading Spa - Italy
- Sindya Power Generating Company Private Ltd
- Commonwealth Bank - Australia
- Ceylon Electricity Board - Sri Lanka
- Port Waratah Coal Services - Australia
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- Central Electricity Authority - India
- Petron Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Ind-Barath Power Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mercator Lines Limited - India
- Manunggal Multi Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Toyota Tsusho Corporation, Japan
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- Coal and Oil Company - UAE
- Africa Commodities Group - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- Singapore Mercantile Exchange
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Parliament of New Zealand
- Ministry of Mines - Canada
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Oldendorff Carriers - Singapore
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- Indo Tambangraya Megah - Indonesia
- Ministry of Transport, Egypt
- Standard Chartered Bank - UAE
- Siam City Cement PLC, Thailand
- Sojitz Corporation - Japan
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Rio Tinto Coal - Australia
- Indian Energy Exchange, India
- Binh Thuan Hamico - Vietnam
- Videocon Industries ltd - India
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- Renaissance Capital - South Africa
- Bhushan Steel Limited - India
- Makarim & Taira - Indonesia
- GVK Power & Infra Limited - India
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- SMC Global Power, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Chettinad Cement Corporation Ltd - India
- Global Green Power PLC Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Petrochimia International Co. Ltd.- Taiwan
- Wilmar Investment Holdings
- MS Steel International - UAE
- Central Java Power - Indonesia
- Kaltim Prima Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Thai Mozambique Logistica
- Mjunction Services Limited - India
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Authority, New Zealand
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bayan Resources Tbk. - Indonesia
- London Commodity Brokers - England
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- TeaM Sual Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parry Sugars Refinery, India
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- Australian Commodity Traders Exchange
- Jaiprakash Power Ventures ltd
- Georgia Ports Authority, United States
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- Independent Power Producers Association of India
- Kideco Jaya Agung - Indonesia
- Straits Asia Resources Limited - Singapore
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- Riau Bara Harum - Indonesia
- Intertek Mineral Services - Indonesia
- Chamber of Mines of South Africa
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Ambuja Cements Ltd - India
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Posco Energy - South Korea
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- White Energy Company Limited
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Aditya Birla Group - India
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Sarangani Energy Corporation, Philippines
- The Treasury - Australian Government
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ASAPP Information Group - India
- Trasteel International SA, Italy
- SN Aboitiz Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Baiduri Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Indika Energy - Indonesia
- New Zealand Coal & Carbon
- Indonesian Coal Mining Association
- Jorong Barutama Greston.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- Borneo Indobara - Indonesia
- Iligan Light & Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- Mercuria Energy - Indonesia
- Interocean Group of Companies - India
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