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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, 30 November 09
INDIA UTILITIES MOVE TO COAL INDEX - PRICING
Indian state utilities are leading a switch to coal index-linked pricing from fixed prices to secure imports and to be visibly paying fair market pr ...
Monday, 30 November 09
RECAPITAL TO ACQUIRE BERAU COAL
Unlisted Indonesian coal producer Berau will redeem outstanding bonds before the acquisition by Recapital Advisers is completed by the end of this y ...
Friday, 27 November 09
IMPORTING LIGNITE INTO COAL RICH KOSOVO
Balkan Insight has discovered that one of Kosovo’s biggest firms is being forced to import lignite from Malaysia and Indonesia, despite estima ...
Friday, 27 November 09
SOUTH AFRICA STILL TOPS IN COAL EXPORT RANKINGS
Mining Weekly reported that, Despite significant coal-mining capacity recently discovered in the Southern African region, according to senior coal a ...
Friday, 27 November 09
BHP SEEKS VARIABLE COKING COAL PRICE IN JAPAN, NIKKEI SAYS
Bloomberg reproted that, BHP Billiton Ltd. has asked Japanese steelmakers to move to pricing of coking coal linked to spot rates rather than negotia ...
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- Billiton Holdings Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Mercuria Energy - Indonesia
- Africa Commodities Group - South Africa
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Siam City Cement PLC, Thailand
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
- Maheswari Brothers Coal Limited - India
- Intertek Mineral Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining Corp, Philippines
- Siam City Cement - Thailand
- The University of Queensland
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- Heidelberg Cement - Germany
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Development Corp, Philippines
- Oldendorff Carriers - Singapore
- GAC Shipping (India) Pvt Ltd
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- SMC Global Power, Philippines
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- Bukit Baiduri Energy - Indonesia
- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
- Interocean Group of Companies - India
- Economic Council, Georgia
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- Bayan Resources Tbk. - Indonesia
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Parliament of New Zealand
- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- San Jose City I Power Corp, Philippines
- Vizag Seaport Private Limited - India
- Rio Tinto Coal - Australia
- Australian Coal Association
- Deloitte Consulting - India
- VISA Power Limited - India
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Kohat Cement Company Ltd. - Pakistan
- Bukit Makmur.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Agrawal Coal Company - India
- Power Finance Corporation Ltd., India
- New Zealand Coal & Carbon
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- Goldman Sachs - Singapore
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Bharathi Cement Corporation - India
- Meenaskhi Energy Private Limited - India
- Minerals Council of Australia
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Borneo Indobara - Indonesia
- Larsen & Toubro Limited - India
- Indian Oil Corporation Limited
- Indian Energy Exchange, India
- Standard Chartered Bank - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- McConnell Dowell - Australia
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- ASAPP Information Group - India
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- Medco Energi Mining Internasional
- ICICI Bank Limited - India
- OPG Power Generation Pvt Ltd - India
- Attock Cement Pakistan Limited
- Indo Tambangraya Megah - Indonesia
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- London Commodity Brokers - England
- PetroVietnam Power Coal Import and Supply Company
- Kapuas Tunggal Persada - Indonesia
- Sojitz Corporation - Japan
- Global Coal Blending Company Limited - Australia
- Mintek Dendrill Indonesia
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Tamil Nadu electricity Board
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- Directorate General of MIneral and Coal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Formosa Plastics Group - Taiwan
- Bulk Trading Sa - Switzerland
- Wood Mackenzie - Singapore
- Orica Mining Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- White Energy Company Limited
- Dalmia Cement Bharat India
- IEA Clean Coal Centre - UK
- Anglo American - United Kingdom
- Therma Luzon, Inc, Philippines
- Altura Mining Limited, Indonesia
- Eastern Coal Council - USA
- International Coal Ventures Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Orica Australia Pty. Ltd.
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Posco Energy - South Korea
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Aditya Birla Group - India
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- PTC India Limited - India
- Jindal Steel & Power Ltd - India
- Thiess Contractors Indonesia
- Pendopo Energi Batubara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Uttam Galva Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- PowerSource Philippines DevCo
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Coal and Oil Company - UAE
- SN Aboitiz Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- Gujarat Sidhee Cement - India
- CIMB Investment Bank - Malaysia
- CNBM International Corporation - China
- Port Waratah Coal Services - Australia
- IHS Mccloskey Coal Group - USA
- Kartika Selabumi Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Binh Thuan Hamico - Vietnam
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Makarim & Taira - Indonesia
- Lanco Infratech Ltd - India
- Ministry of Transport, Egypt
- Semirara Mining and Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Globalindo Alam Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Ministry of Mines - Canada
- GVK Power & Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Bhatia International Limited - India
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- Sakthi Sugars Limited - India
- Grasim Industreis Ltd - India
- Mjunction Services Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- The Treasury - Australian Government
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- SMG Consultants - Indonesia
- Videocon Industries ltd - India
- Carbofer General Trading SA - India
- Meralco Power Generation, Philippines
- Toyota Tsusho Corporation, Japan
- Ind-Barath Power Infra Limited - India
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