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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, 07 December 09
CHINA COKING COAL PRICE MAY RISE 14% ON DEFICIT, CITIGROUP SAYS
Coking coal prices in China, the world’s biggest steel producer, may rise 14 percent next year because of a supply deficit, Citigroup Inc. sai ...
Monday, 07 December 09
JSW STEEL TO SELL MOZAMBIQUE COAL MINE FOR RS 300 CRORE
JSW Steel may sell its coal mine in Mozambique to sister company JSW Energy as the mine has become commercially unviable for the steel producer, a t ...
Monday, 07 December 09
BLACK RIDGE MINING ENTERS AGREEMENT WITH INDONESIAN COAL PRODUCER
Australian-listed Black Ridge Mining has entered into an exclusive dealing and non-circumvention agreement with Indonesian coal producer PT. Inmas A ...
Sunday, 06 December 09
THE ECI / CHINA (S7) ROUTE SOFTENED AND WAS AT US$ 25,275 PER DAY - VISTAAR
COALspot.com (Singapore): "The market was bit soft in the beginning of the week, however towards mid week that market started to pick up and th ...
Sunday, 06 December 09
NEW MANGALORE PORT GETS UPCL'S FIRST COAL PARCEL FROM INDONESIA
The Lanco Group-promoted Udupi Power Corporation Ltd (UPCL) has received the first parcel of imported coal from Indonesia at the New Mangalore Port. ...
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- Coalindo Energy - Indonesia
- Wilmar Investment Holdings
- CNBM International Corporation - China
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
- Riau Bara Harum - Indonesia
- Meenaskhi Energy Private Limited - India
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- CIMB Investment Bank - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- Trasteel International SA, Italy
- Directorate General of MIneral and Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Mjunction Services Limited - India
- Coal and Oil Company - UAE
- Parliament of New Zealand
- MS Steel International - UAE
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- Bayan Resources Tbk. - Indonesia
- Goldman Sachs - Singapore
- Latin American Coal - Colombia
- Indo Tambangraya Megah - Indonesia
- Sarangani Energy Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Romanian Commodities Exchange
- India Bulls Power Limited - India
- Coastal Gujarat Power Limited - India
- VISA Power Limited - India
- European Bulk Services B.V. - Netherlands
- GVK Power & Infra Limited - India
- Medco Energi Mining Internasional
- Indian Energy Exchange, India
- Dalmia Cement Bharat India
- Thai Mozambique Logistica
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Oldendorff Carriers - Singapore
- White Energy Company Limited
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Petron Corporation, Philippines
- Uttam Galva Steels Limited - India
- Georgia Ports Authority, United States
- Rashtriya Ispat Nigam Limited - India
- Gujarat Mineral Development Corp Ltd - India
- SMC Global Power, Philippines
- Ceylon Electricity Board - Sri Lanka
- New Zealand Coal & Carbon
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Star Paper Mills Limited - India
- Krishnapatnam Port Company Ltd. - India
- GAC Shipping (India) Pvt Ltd
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- Gujarat Sidhee Cement - India
- Tamil Nadu electricity Board
- Bhoruka Overseas - Indonesia
- Orica Mining Services - Indonesia
- Borneo Indobara - Indonesia
- Indian Oil Corporation Limited
- Ministry of Mines - Canada
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- Siam City Cement PLC, Thailand
- Aboitiz Power Corporation - Philippines
- Agrawal Coal Company - India
- Ministry of Finance - Indonesia
- Power Finance Corporation Ltd., India
- Energy Development Corp, Philippines
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Jindal Steel & Power Ltd - India
- Heidelberg Cement - Germany
- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Interocean Group of Companies - India
- London Commodity Brokers - England
- Maheswari Brothers Coal Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMG Consultants - Indonesia
- PTC India Limited - India
- Barasentosa Lestari - Indonesia
- Australian Commodity Traders Exchange
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Rio Tinto Coal - Australia
- San Jose City I Power Corp, Philippines
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Vedanta Resources Plc - India
- Global Business Power Corporation, Philippines
- Planning Commission, India
- Posco Energy - South Korea
- Timah Investasi Mineral - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Kumho Petrochemical, South Korea
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Singapore Mercantile Exchange
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- Videocon Industries ltd - India
- Sakthi Sugars Limited - India
- The University of Queensland
- Sindya Power Generating Company Private Ltd
- Essar Steel Hazira Ltd - India
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Wood Mackenzie - Singapore
- Chamber of Mines of South Africa
- Lanco Infratech Ltd - India
- TeaM Sual Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- GMR Energy Limited - India
- Renaissance Capital - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- IHS Mccloskey Coal Group - USA
- Carbofer General Trading SA - India
- Australian Coal Association
- Kaltim Prima Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Manunggal Multi Energi - Indonesia
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- Price Waterhouse Coopers - Russia
- Straits Asia Resources Limited - Singapore
- Antam Resourcindo - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Economic Council, Georgia
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Xindia Steels Limited - India
- Deloitte Consulting - India
- Kalimantan Lumbung Energi - Indonesia
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- Semirara Mining Corp, Philippines
- Bulk Trading Sa - Switzerland
- Malabar Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- Madhucon Powers Ltd - India
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Attock Cement Pakistan Limited
- Global Coal Blending Company Limited - Australia
- Billiton Holdings Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- Sinarmas Energy and Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- Eastern Coal Council - USA
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Bukit Asam (Persero) Tbk - Indonesia
- Mercator Lines Limited - India
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Ind-Barath Power Infra Limited - India
- Minerals Council of Australia
- McConnell Dowell - Australia
- Electricity Authority, New Zealand
- Sical Logistics Limited - India
- TNB Fuel Sdn Bhd - Malaysia
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