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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, 27 November 09
EXXARO SEES HIGH COAL DEMAND RAISING PRICES
Reuters reported that, South African diversified miner Exxaro Resources said on Thursday it expected coal prices to rise to between $70 and $75 per ...
Friday, 27 November 09
CENTENNIAL SAYS ENERGY-COAL PRICE TO RISE AS CHINA SEEKS FUEL
Bloomberg reported that, Centennial Coal Co., an Australian producer of the fuel, said contract prices are expected to rise in 2010, with Chinese co ...
Friday, 27 November 09
IN FIRST-10-MONTH OF 2009 COAL IMPORTS IN GUANGXI-FANGCHENG EXCEEDED FULL-2008 IMPORTS
According to Customs statistics, during the January-October, Fangcheng port accumulatively imported 3.676mln tons valuing U.S.$370, rising by 53.8% ...
Thursday, 26 November 09
CHINA'S COAL IMPORTS TO RISE BY 170 PERCENT IN 2009
According to the statistics released by China's General Administration of Customs on November 23, China's coal imports for October totaled 11.1 mi ...
Thursday, 26 November 09
CIL EYES OVERSEAS ACQUISITIONS TO BRIDGE SUPPLY GAP
Coal Minister Sriprakash Jaiswal on Wednesday said that state-run coal major Coal India is looking to acquire coal blocks in the US and
othe ...
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- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- ASAPP Information Group - India
- Petron Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Mjunction Services Limited - India
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- Kumho Petrochemical, South Korea
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- Semirara Mining and Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Toyota Tsusho Corporation, Japan
- Sarangani Energy Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- Lanco Infratech Ltd - India
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- Tamil Nadu electricity Board
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- Bukit Makmur.PT - Indonesia
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- Jaiprakash Power Ventures ltd
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- Indian Oil Corporation Limited
- San Jose City I Power Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- SN Aboitiz Power Inc, Philippines
- VISA Power Limited - India
- Coastal Gujarat Power Limited - India
- Chamber of Mines of South Africa
- Thiess Contractors Indonesia
- Metalloyd Limited - United Kingdom
- Jindal Steel & Power Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Rio Tinto Coal - Australia
- Global Business Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Central Java Power - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Attock Cement Pakistan Limited
- Salva Resources Pvt Ltd - India
- Planning Commission, India
- Semirara Mining Corp, Philippines
- Riau Bara Harum - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Therma Luzon, Inc, Philippines
- Independent Power Producers Association of India
- Timah Investasi Mineral - Indoneisa
- Antam Resourcindo - Indonesia
- Dalmia Cement Bharat India
- Interocean Group of Companies - India
- The Treasury - Australian Government
- Coal and Oil Company - UAE
- Baramulti Group, Indonesia
- Indo Tambangraya Megah - Indonesia
- Georgia Ports Authority, United States
- Holcim Trading Pte Ltd - Singapore
- Mercuria Energy - Indonesia
- Carbofer General Trading SA - India
- Indonesian Coal Mining Association
- Economic Council, Georgia
- Kaltim Prima Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- Manunggal Multi Energi - Indonesia
- Ambuja Cements Ltd - India
- Wood Mackenzie - Singapore
- Port Waratah Coal Services - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Vizag Seaport Private Limited - India
- Renaissance Capital - South Africa
- India Bulls Power Limited - India
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- Iligan Light & Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- IEA Clean Coal Centre - UK
- Aboitiz Power Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- McConnell Dowell - Australia
- SMG Consultants - Indonesia
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Mines - Canada
- Borneo Indobara - Indonesia
- Medco Energi Mining Internasional
- Ministry of Finance - Indonesia
- Heidelberg Cement - Germany
- Videocon Industries ltd - India
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
- Formosa Plastics Group - Taiwan
- Ind-Barath Power Infra Limited - India
- Australian Commodity Traders Exchange
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- PTC India Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Power Finance Corporation Ltd., India
- Tata Chemicals Ltd - India
- Eastern Coal Council - USA
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Xindia Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Mintek Dendrill Indonesia
- Banpu Public Company Limited - Thailand
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- Thai Mozambique Logistica
- Bharathi Cement Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- PetroVietnam Power Coal Import and Supply Company
- Globalindo Alam Lestari - Indonesia
- Latin American Coal - Colombia
- Bukit Asam (Persero) Tbk - Indonesia
- The University of Queensland
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- Minerals Council of Australia
- Meralco Power Generation, Philippines
- Energy Development Corp, Philippines
- Electricity Authority, New Zealand
- Sakthi Sugars Limited - India
- Altura Mining Limited, Indonesia
- New Zealand Coal & Carbon
- Makarim & Taira - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Australian Coal Association
- Siam City Cement - Thailand
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- White Energy Company Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- Cement Manufacturers Association - India
- Parry Sugars Refinery, India
- Aditya Birla Group - India
- Miang Besar Coal Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- Standard Chartered Bank - UAE
- Central Electricity Authority - India
- Grasim Industreis Ltd - India
- Indian Energy Exchange, India
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- TNB Fuel Sdn Bhd - Malaysia
- PowerSource Philippines DevCo
- Global Green Power PLC Corporation, Philippines
- Deloitte Consulting - India
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Chettinad Cement Corporation Ltd - India
- South Luzon Thermal Energy Corporation
- MS Steel International - UAE
- Edison Trading Spa - Italy
- CNBM International Corporation - China
- Ceylon Electricity Board - Sri Lanka
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