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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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Saturday, 12 December 09
QUEENSLAND APPROVES A$4 BILLION COAL TERMINAL PROJECT
Queensland’s state government said it has signed a mandate approving development of the A$4 billion ($3.7 billion) Wiggins Island coal termina ...
Saturday, 12 December 09
INDONESIA'S COAL RUSH - SOOTY SUCCESS
Rising demand from China and India is stoking Indonesia’s exports of coal
FOR power stations on the coast of China, it is often cheaper to ...
Thursday, 10 December 09
ENVIROCOAL REGISTERED IN 33 COUNTRIES
PT Adaro concerned to register the brand overseas
PT Adaro Energy Tbk has registered the Envirocoal trademark for its coal products in 33 countri ...
Thursday, 10 December 09
INDIA TO IMPORT 28 MILLION TONNE OF STEAM COAL
Faced with short supply of coal from domestic sources, the Indian power ministry has revised upwards its coal import target for the current fiscal t ...
Thursday, 10 December 09
INDONESIA'S NEW MINING LAW WILL NOT LIMIT COAL EXPORTS, SAYS GOVERNMENT
The government will allow coal producers to continue exporting even if they miss domestic sales requirements, a senior mining official said, marking ...
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- Meralco Power Generation, Philippines
- VISA Power Limited - India
- Dalmia Cement Bharat India
- OPG Power Generation Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Eastern Coal Council - USA
- International Coal Ventures Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Timah Investasi Mineral - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Electricity Generating Authority of Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Indo Tambangraya Megah - Indonesia
- Independent Power Producers Association of India
- Kideco Jaya Agung - Indonesia
- Toyota Tsusho Corporation, Japan
- Asmin Koalindo Tuhup - Indonesia
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Lanco Infratech Ltd - India
- Power Finance Corporation Ltd., India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- IHS Mccloskey Coal Group - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- SMC Global Power, Philippines
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- Thiess Contractors Indonesia
- Bhatia International Limited - India
- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Oldendorff Carriers - Singapore
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Sojitz Corporation - Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
- Wood Mackenzie - Singapore
- Coastal Gujarat Power Limited - India
- ASAPP Information Group - India
- Bharathi Cement Corporation - India
- Bangladesh Power Developement Board
- Aditya Birla Group - India
- Ministry of Transport, Egypt
- Trasteel International SA, Italy
- Rashtriya Ispat Nigam Limited - India
- Gujarat Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Tamil Nadu electricity Board
- Central Electricity Authority - India
- Orica Mining Services - Indonesia
- Kumho Petrochemical, South Korea
- Miang Besar Coal Terminal - Indonesia
- Riau Bara Harum - Indonesia
- MS Steel International - UAE
- Xindia Steels Limited - India
- Deloitte Consulting - India
- The State Trading Corporation of India Ltd
- Cement Manufacturers Association - India
- San Jose City I Power Corp, Philippines
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- Rio Tinto Coal - Australia
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Kalimantan Lumbung Energi - Indonesia
- Carbofer General Trading SA - India
- Simpson Spence & Young - Indonesia
- The University of Queensland
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- Ceylon Electricity Board - Sri Lanka
- Videocon Industries ltd - India
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Krishnapatnam Port Company Ltd. - India
- Kobexindo Tractors - Indoneisa
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- Mjunction Services Limited - India
- Renaissance Capital - South Africa
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- Salva Resources Pvt Ltd - India
- Indian Oil Corporation Limited
- Barasentosa Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Minerals Council of Australia
- Ministry of Mines - Canada
- Samtan Co., Ltd - South Korea
- Meenaskhi Energy Private Limited - India
- Iligan Light & Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Interocean Group of Companies - India
- Heidelberg Cement - Germany
- ICICI Bank Limited - India
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- Star Paper Mills Limited - India
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- Planning Commission, India
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Mercator Lines Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
- Australian Coal Association
- Global Business Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- Billiton Holdings Pty Ltd - Australia
- Parry Sugars Refinery, India
- Mintek Dendrill Indonesia
- Sindya Power Generating Company Private Ltd
- Semirara Mining and Power Corporation, Philippines
- Attock Cement Pakistan Limited
- SN Aboitiz Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Sinarmas Energy and Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Indian Energy Exchange, India
- Jorong Barutama Greston.PT - Indonesia
- Economic Council, Georgia
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Ministry of Finance - Indonesia
- Georgia Ports Authority, United States
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Wilmar Investment Holdings
- Bulk Trading Sa - Switzerland
- Semirara Mining Corp, Philippines
- Vedanta Resources Plc - India
- Marubeni Corporation - India
- GMR Energy Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- CIMB Investment Bank - Malaysia
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- GVK Power & Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Parliament of New Zealand
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- India Bulls Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- The Treasury - Australian Government
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- McConnell Dowell - Australia
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Global Coal Blending Company Limited - Australia
- SMG Consultants - Indonesia
- GAC Shipping (India) Pvt Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PowerSource Philippines DevCo
- Karbindo Abesyapradhi - Indoneisa
- Romanian Commodities Exchange
- Goldman Sachs - Singapore
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
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