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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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Monday, 14 December 09
RICHARDS BAY COAL TO FINISH EXPANSION IN 1ST QUARTER
Richards Bay Coal Terminal, which ships more than a quarter of Europe’s energy coal, said it will complete its Phase 5 expansion project in th ...
Monday, 14 December 09
SOUTH AFRICAN STEAM COAL PRICES FIRMING UP FOR Q1 TRADE
Reuters reported that Q1 South African coal prices firmed again slightly largely on Asian demand but European delivered prices were little changed.
...
Sunday, 13 December 09
THE FREIGHT MARKET SEEMS TO BE COMING OFF A BIT AND THE MARKET MAY BE SOFT NEXT WEEK - CAPT. REDDY
COALspot.com (Singapore): "The market softened this week especially in the Cape and Panamax segment , where as the Supramax and Handy size was ...
Sunday, 13 December 09
NAPOCOR CUTS COAL IMPORT PROJECTION FOR 2010
STATE-RUN National Power Corp. slashed its planned coal importation for 2010 to only 200,000 metric tons from 3.4 million MT this year, as the gover ...
Sunday, 13 December 09
CHINESE BUYERS SEEK LARGE TONNAGE OF SOUTH AFRICA STEAM COAL
Reuters reported that Chinese utilities on the coast and inland are seeking several cape cargoes each of South African coal for 2010 delivery becaus ...
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- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- Renaissance Capital - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
- Kaltim Prima Coal - Indonesia
- Marubeni Corporation - India
- Sical Logistics Limited - India
- Attock Cement Pakistan Limited
- Timah Investasi Mineral - Indoneisa
- Larsen & Toubro Limited - India
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Barasentosa Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- The University of Queensland
- GMR Energy Limited - India
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- Dalmia Cement Bharat India
- Sakthi Sugars Limited - India
- Ministry of Mines - Canada
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Bukit Makmur.PT - Indonesia
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Star Paper Mills Limited - India
- Bangladesh Power Developement Board
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- The Treasury - Australian Government
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- Kumho Petrochemical, South Korea
- Rashtriya Ispat Nigam Limited - India
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- Siam City Cement - Thailand
- Manunggal Multi Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
- Ministry of Transport, Egypt
- Aboitiz Power Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Sindya Power Generating Company Private Ltd
- Chamber of Mines of South Africa
- Cement Manufacturers Association - India
- Mercator Lines Limited - India
- Parry Sugars Refinery, India
- Bahari Cakrawala Sebuku - Indonesia
- Minerals Council of Australia
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
- Binh Thuan Hamico - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- SMG Consultants - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Electricity Authority, New Zealand
- Sarangani Energy Corporation, Philippines
- PowerSource Philippines DevCo
- Salva Resources Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- Aditya Birla Group - India
- Posco Energy - South Korea
- Vedanta Resources Plc - India
- Bayan Resources Tbk. - Indonesia
- The State Trading Corporation of India Ltd
- Leighton Contractors Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Sojitz Corporation - Japan
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- Merrill Lynch Commodities Europe
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meenaskhi Energy Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- London Commodity Brokers - England
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Parliament of New Zealand
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- Planning Commission, India
- Trasteel International SA, Italy
- Eastern Energy - Thailand
- Orica Australia Pty. Ltd.
- Alfred C Toepfer International GmbH - Germany
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- White Energy Company Limited
- European Bulk Services B.V. - Netherlands
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- SMC Global Power, Philippines
- Interocean Group of Companies - India
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- Samtan Co., Ltd - South Korea
- San Jose City I Power Corp, Philippines
- Oldendorff Carriers - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Georgia Ports Authority, United States
- India Bulls Power Limited - India
- IHS Mccloskey Coal Group - USA
- Karaikal Port Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Indian Energy Exchange, India
- Gujarat Sidhee Cement - India
- Global Business Power Corporation, Philippines
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Australian Coal Association
- Coal and Oil Company - UAE
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- MS Steel International - UAE
- Malabar Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- Energy Link Ltd, New Zealand
- Heidelberg Cement - Germany
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Lanco Infratech Ltd - India
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- Therma Luzon, Inc, Philippines
- Economic Council, Georgia
- Borneo Indobara - Indonesia
- Bulk Trading Sa - Switzerland
- Global Coal Blending Company Limited - Australia
- Anglo American - United Kingdom
- VISA Power Limited - India
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- McConnell Dowell - Australia
- Directorate General of MIneral and Coal - Indonesia
- Port Waratah Coal Services - Australia
- Antam Resourcindo - Indonesia
- Intertek Mineral Services - Indonesia
- New Zealand Coal & Carbon
- Mercuria Energy - Indonesia
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- Semirara Mining and Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- Uttam Galva Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- Grasim Industreis Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- Eastern Coal Council - USA
- Indogreen Group - Indonesia
- PTC India Limited - India
- Kepco SPC Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
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