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