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