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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
JSW ENERGY TO BUY OUT PARENT FIRM'S COAL BLOCK
JSW Energy plans to buy the stake held by JSW Steel in a thermal coal block in Mozambique in an attempt to become an integrated energy company with ...
Thursday, 03 December 09
JAPAN 2010 COAL IMPORTS SEEN FLAT, INDIA'S ROBUST - INDUSTRY
* Japan's demand seen steady in 2010 at 110 mln tonnes
* India's demand seen as robust, at 70 mln tonnes
Reuters reported that, Thermal coal i ...
Thursday, 03 December 09
INDONESIA MAY ALLOW COAL SALES BELOW GOVT PRICE
Reuters reported that, Indonesia is considering giving producers some flexibility to sell coal below the government's monthly benchmark price to co ...
Thursday, 03 December 09
INDONESIA SEEKS TO INCREASE COAL SHIPMENTS TO INDIA, CHINA
Bloomberg reproted that, Indonesia, Asia’s biggest coal exporter, seeks to increase shipments to India and China as the economies improve and ...
Thursday, 03 December 09
COAL INDIA IPO LIKELY TO HIT MARKETS BY NOVEMBER 2010
Soon investors will get to own a slice of India's largest coal mining company. Coal India its initial public offering will hit markets in November ...
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- Global Business Power Corporation, Philippines
- Siam City Cement - Thailand
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- White Energy Company Limited
- IEA Clean Coal Centre - UK
- Indo Tambangraya Megah - Indonesia
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Madhucon Powers Ltd - India
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Economic Council, Georgia
- Kideco Jaya Agung - Indonesia
- Renaissance Capital - South Africa
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- Sical Logistics Limited - India
- PTC India Limited - India
- Ind-Barath Power Infra Limited - India
- Singapore Mercantile Exchange
- Kumho Petrochemical, South Korea
- Power Finance Corporation Ltd., India
- Heidelberg Cement - Germany
- Intertek Mineral Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Xindia Steels Limited - India
- Anglo American - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
- Globalindo Alam Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Altura Mining Limited, Indonesia
- PNOC Exploration Corporation - Philippines
- Merrill Lynch Commodities Europe
- Bangladesh Power Developement Board
- Australian Coal Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Marubeni Corporation - India
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Lanco Infratech Ltd - India
- Vizag Seaport Private Limited - India
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Malabar Cements Ltd - India
- Parry Sugars Refinery, India
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- Videocon Industries ltd - India
- Billiton Holdings Pty Ltd - Australia
- Bhushan Steel Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Miang Besar Coal Terminal - Indonesia
- Mjunction Services Limited - India
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- Banpu Public Company Limited - Thailand
- Ceylon Electricity Board - Sri Lanka
- Bhatia International Limited - India
- Deloitte Consulting - India
- Posco Energy - South Korea
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- Coal and Oil Company - UAE
- Riau Bara Harum - Indonesia
- Kobexindo Tractors - Indoneisa
- Thai Mozambique Logistica
- Holcim Trading Pte Ltd - Singapore
- Barasentosa Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- Mercator Lines Limited - India
- Electricity Authority, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Central Electricity Authority - India
- GN Power Mariveles Coal Plant, Philippines
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Energy - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karaikal Port Pvt Ltd - India
- The University of Queensland
- Therma Luzon, Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- GVK Power & Infra Limited - India
- Cement Manufacturers Association - India
- San Jose City I Power Corp, Philippines
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- CIMB Investment Bank - Malaysia
- Sojitz Corporation - Japan
- Meenaskhi Energy Private Limited - India
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- Aditya Birla Group - India
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- Price Waterhouse Coopers - Russia
- Kartika Selabumi Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
- Maharashtra Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- LBH Netherlands Bv - Netherlands
- Iligan Light & Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- Binh Thuan Hamico - Vietnam
- Planning Commission, India
- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- Straits Asia Resources Limited - Singapore
- Petron Corporation, Philippines
- Indika Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- IHS Mccloskey Coal Group - USA
- Edison Trading Spa - Italy
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- The Treasury - Australian Government
- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- Rashtriya Ispat Nigam Limited - India
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- Semirara Mining and Power Corporation, Philippines
- MS Steel International - UAE
- Medco Energi Mining Internasional
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- GMR Energy Limited - India
- Energy Link Ltd, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement PLC, Thailand
- Wilmar Investment Holdings
- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- SMC Global Power, Philippines
- AsiaOL BioFuels Corp., Philippines
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Bhoruka Overseas - Indonesia
- Rio Tinto Coal - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Georgia Ports Authority, United States
- Bulk Trading Sa - Switzerland
- Kalimantan Lumbung Energi - Indonesia
- Mercuria Energy - Indonesia
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Wood Mackenzie - Singapore
- Uttam Galva Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- South Luzon Thermal Energy Corporation
- Electricity Generating Authority of Thailand
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Alfred C Toepfer International GmbH - Germany
- Commonwealth Bank - Australia
- Jaiprakash Power Ventures ltd
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- ICICI Bank Limited - India
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