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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, 09 December 09
INDONESIA'S RECAPITAL TO PAY $1.48 BLN FOR BERAU
Recapital Advisors, an Indonesian investment firm, will pay $1.48 billion in cash and notes to buy coal miner PT Berau Coal, $300 million of which i ...
Wednesday, 09 December 09
COAL INDIA YET TO IMPLEMENT IMPORT LINKED PRICES
Coal India Ltd is adopting a conservative approach in pricing despite being allowed to charge import-linked price for the country's minuscule reser ...
Wednesday, 09 December 09
INDIA NEEDS TO IMPORT 29 MILLION TONNE STEAM COAL IN 2009 - 10
Mr Sriprakash Jaiswal Indian minister of state (Independent Charge) for coal informed the Rajya Sabha that Central Electricity Authority has estimat ...
Tuesday, 08 December 09
VOLATILE COAL PRICES SPUR ASIAN HEDGING
Volatile coal prices are forcing staid Asian power firms to change the way they buy fuel, setting the scene for a hedging boom as a growing array of ...
Tuesday, 08 December 09
MEC TO SHIP 2M T INDONESIA COAL TO INDIA IN 2010 - REUTER'S INTERVIEW
The UAE's Middle East Coal plans to start operation of coal mines in Indonesia's East Kalimantan province next year with initial production of 2 m ...
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- McConnell Dowell - Australia
- GVK Power & Infra Limited - India
- Simpson Spence & Young - Indonesia
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- Chettinad Cement Corporation Ltd - India
- Petron Corporation, Philippines
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- Attock Cement Pakistan Limited
- Sakthi Sugars Limited - India
- Mercator Lines Limited - India
- Formosa Plastics Group - Taiwan
- Posco Energy - South Korea
- Uttam Galva Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Sojitz Corporation - Japan
- Antam Resourcindo - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- Eastern Energy - Thailand
- Romanian Commodities Exchange
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- Ministry of Mines - Canada
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- Anglo American - United Kingdom
- Binh Thuan Hamico - Vietnam
- Minerals Council of Australia
- Latin American Coal - Colombia
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- Indian Energy Exchange, India
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- Independent Power Producers Association of India
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- Ceylon Electricity Board - Sri Lanka
- SMG Consultants - Indonesia
- Singapore Mercantile Exchange
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Sidhee Cement - India
- Electricity Authority, New Zealand
- Siam City Cement - Thailand
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Baramulti Group, Indonesia
- Carbofer General Trading SA - India
- Global Business Power Corporation, Philippines
- New Zealand Coal & Carbon
- Ambuja Cements Ltd - India
- Siam City Cement PLC, Thailand
- Semirara Mining and Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Iligan Light & Power Inc, Philippines
- Edison Trading Spa - Italy
- Orica Mining Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- Dalmia Cement Bharat India
- Central Java Power - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vizag Seaport Private Limited - India
- European Bulk Services B.V. - Netherlands
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Kapuas Tunggal Persada - Indonesia
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- Meenaskhi Energy Private Limited - India
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Vedanta Resources Plc - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Xindia Steels Limited - India
- Renaissance Capital - South Africa
- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Borneo Indobara - Indonesia
- Energy Link Ltd, New Zealand
- Kumho Petrochemical, South Korea
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Goldman Sachs - Singapore
- Star Paper Mills Limited - India
- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Ministry of Finance - Indonesia
- Bhatia International Limited - India
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- India Bulls Power Limited - India
- Karaikal Port Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- Thiess Contractors Indonesia
- Semirara Mining Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Chamber of Mines of South Africa
- Coastal Gujarat Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Mintek Dendrill Indonesia
- Jaiprakash Power Ventures ltd
- Intertek Mineral Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- Indonesian Coal Mining Association
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Energy Development Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Tamil Nadu electricity Board
- Mjunction Services Limited - India
- Thai Mozambique Logistica
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Meralco Power Generation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- The State Trading Corporation of India Ltd
- CIMB Investment Bank - Malaysia
- Savvy Resources Ltd - HongKong
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- GN Power Mariveles Coal Plant, Philippines
- Madhucon Powers Ltd - India
- Lanco Infratech Ltd - India
- Larsen & Toubro Limited - India
- The University of Queensland
- Australian Commodity Traders Exchange
- GMR Energy Limited - India
- Standard Chartered Bank - UAE
- VISA Power Limited - India
- Oldendorff Carriers - Singapore
- Eastern Coal Council - USA
- Merrill Lynch Commodities Europe
- Bukit Makmur.PT - Indonesia
- Rio Tinto Coal - Australia
- Indian Oil Corporation Limited
- The Treasury - Australian Government
- Videocon Industries ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Riau Bara Harum - Indonesia
- Manunggal Multi Energi - Indonesia
- Economic Council, Georgia
- Aditya Birla Group - India
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Coal Association
- Tata Chemicals Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Sindya Power Generating Company Private Ltd
- Asmin Koalindo Tuhup - Indonesia
- MS Steel International - UAE
- Power Finance Corporation Ltd., India
- Maheswari Brothers Coal Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Bangladesh Power Developement Board
- AsiaOL BioFuels Corp., Philippines
- Sical Logistics Limited - India
- Makarim & Taira - Indonesia
- IEA Clean Coal Centre - UK
- South Luzon Thermal Energy Corporation
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- White Energy Company Limited
- PTC India Limited - India
- Vijayanagar Sugar Pvt Ltd - India
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