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