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