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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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Friday, 04 December 09
CHINA'S COAL IMPORTS PREDICTED TO DECLINE IN 2010
China's eye-catching coal import figure s are unlikely to extend into 2010 given the predicted narrow-down of the coal price spread between the hom ...
Friday, 04 December 09
SUBHASH PROJECTS BEGINS MINING AT INDONESIAN COAL BLOCK
Kolkata-based infrastructure company Subhash Projects and Marketing (SPML) has begun mining at its coal block in Indonesia and will begin despatchin ...
Friday, 04 December 09
DRY BULK MARKET IS ON THE RISE AGAIN
Proving rather resilient, compared to previous behaviors, the dry bulk market has been on a rebound mode once again, after a two-week fall, which su ...
Friday, 04 December 09
INDONESIA'S BUMI EYES MARKETING DEAL FOR BERAU COAL
Reuters reported that, Indonesian coal miner PT Bumi Resources Tbk said on Thursday it is in talks to be the exclusive marketing agent for coal prod ...
Friday, 04 December 09
KALIMANTAN GOLD AGREES TO SELL IBP COAL CONCESSION
COALspot.com ( Press Release): Kalimantan Gold Corporation Limited ("KLG" or the "Company"), which undertook drilling and had an ...
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- Xindia Steels Limited - India
- Bhatia International Limited - India
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Link Ltd, New Zealand
- New Zealand Coal & Carbon
- London Commodity Brokers - England
- Africa Commodities Group - South Africa
- Jaiprakash Power Ventures ltd
- European Bulk Services B.V. - Netherlands
- IHS Mccloskey Coal Group - USA
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Sical Logistics Limited - India
- Lanco Infratech Ltd - India
- Price Waterhouse Coopers - Russia
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
- Bulk Trading Sa - Switzerland
- Baramulti Group, Indonesia
- Bukit Makmur.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- MS Steel International - UAE
- Bukit Baiduri Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- Carbofer General Trading SA - India
- Georgia Ports Authority, United States
- Dalmia Cement Bharat India
- Indonesian Coal Mining Association
- Bhoruka Overseas - Indonesia
- Australian Coal Association
- Independent Power Producers Association of India
- The University of Queensland
- Central Java Power - Indonesia
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Larsen & Toubro Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- Eastern Energy - Thailand
- Wood Mackenzie - Singapore
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- Mintek Dendrill Indonesia
- Ind-Barath Power Infra Limited - India
- Oldendorff Carriers - Singapore
- Metalloyd Limited - United Kingdom
- Kideco Jaya Agung - Indonesia
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
- Tamil Nadu electricity Board
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- Indo Tambangraya Megah - Indonesia
- McConnell Dowell - Australia
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- India Bulls Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Aboitiz Power Corporation - Philippines
- Cement Manufacturers Association - India
- Directorate General of MIneral and Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- CNBM International Corporation - China
- Edison Trading Spa - Italy
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Orica Australia Pty. Ltd.
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Ministry of Finance - Indonesia
- GMR Energy Limited - India
- Sree Jayajothi Cements Limited - India
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- Timah Investasi Mineral - Indoneisa
- Heidelberg Cement - Germany
- Electricity Generating Authority of Thailand
- Global Coal Blending Company Limited - Australia
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- Planning Commission, India
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mjunction Services Limited - India
- Coastal Gujarat Power Limited - India
- Manunggal Multi Energi - Indonesia
- Riau Bara Harum - Indonesia
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Bharathi Cement Corporation - India
- Agrawal Coal Company - India
- Meralco Power Generation, Philippines
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Sidhee Cement - India
- GN Power Mariveles Coal Plant, Philippines
- Attock Cement Pakistan Limited
- Pendopo Energi Batubara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- Vizag Seaport Private Limited - India
- Petron Corporation, Philippines
- ASAPP Information Group - India
- Eastern Coal Council - USA
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Binh Thuan Hamico - Vietnam
- Latin American Coal - Colombia
- Coal and Oil Company - UAE
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- Parliament of New Zealand
- Economic Council, Georgia
- Ministry of Transport, Egypt
- Anglo American - United Kingdom
- Coalindo Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
- PTC India Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kapuas Tunggal Persada - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Thiess Contractors Indonesia
- Savvy Resources Ltd - HongKong
- Jorong Barutama Greston.PT - Indonesia
- Wilmar Investment Holdings
- Malabar Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Ministry of Mines - Canada
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- Siam City Cement - Thailand
- SMC Global Power, Philippines
- Aditya Birla Group - India
- TeaM Sual Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- The State Trading Corporation of India Ltd
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- Videocon Industries ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
- Indika Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Power Finance Corporation Ltd., India
- Bayan Resources Tbk. - Indonesia
- Antam Resourcindo - Indonesia
- LBH Netherlands Bv - Netherlands
- Standard Chartered Bank - UAE
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- ICICI Bank Limited - India
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
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