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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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Wednesday, 25 November 09
NAPOCOR SCRAPS AWARD OF 715,000 TONS COAL
Top Philippine electricity producer National Power Corp. (Napocor) said on Wednesday it had cancelled plans to award 715,000 tons in coal supply con ...
Wednesday, 25 November 09
RISING FREIGHT RATES HIT COAL IMPORTERS
While state-owned NTPC’s 12.5 million tonne coal import order may have been aimed at plugging the shortage of coal at its thermal power plants ...
Wednesday, 25 November 09
CSN TO BUY RIVERSDALE STAKE TO BOOST COAL SUPPLIES
Cia. Siderurgica Nacional SA plans to buy 16.3 percent of Australian coal-exploration company Riversdale Mining Ltd. for about A$190.5 million ($175 ...
Tuesday, 24 November 09
ICRA DOWNGRADES TNPL`S RATING TO LAA
Credit rating agency, ICRA has revised the long term rating for the Rs 11.25 billion long-term fund-based bank facilities and Rs 1.5 billion non-con ...
Monday, 23 November 09
INDONESIA MINING RULE THREATENS INVESTMENT DRIVE
A new Indonesian mining rule, limiting contract work that can be outsourced and favouring local players, is shaping up as a new blow to plans ...
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- Orica Mining Services - Indonesia
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- GN Power Mariveles Coal Plant, Philippines
- IEA Clean Coal Centre - UK
- Bukit Baiduri Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Vedanta Resources Plc - India
- International Coal Ventures Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- The University of Queensland
- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
- ICICI Bank Limited - India
- ASAPP Information Group - India
- Agrawal Coal Company - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meralco Power Generation, Philippines
- Bhushan Steel Limited - India
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- Kaltim Prima Coal - Indonesia
- Commonwealth Bank - Australia
- Intertek Mineral Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- Georgia Ports Authority, United States
- Sojitz Corporation - Japan
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Sindya Power Generating Company Private Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Independent Power Producers Association of India
- PetroVietnam Power Coal Import and Supply Company
- Carbofer General Trading SA - India
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- VISA Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Ministry of Transport, Egypt
- Dalmia Cement Bharat India
- Lanco Infratech Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Aditya Birla Group - India
- Wilmar Investment Holdings
- Bangladesh Power Developement Board
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- Edison Trading Spa - Italy
- Ministry of Finance - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Timah Investasi Mineral - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Mercator Lines Limited - India
- Vizag Seaport Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Singapore Mercantile Exchange
- Global Green Power PLC Corporation, Philippines
- Ambuja Cements Ltd - India
- CNBM International Corporation - China
- Minerals Council of Australia
- Indian Energy Exchange, India
- Gujarat Mineral Development Corp Ltd - India
- Parliament of New Zealand
- Oldendorff Carriers - Singapore
- Africa Commodities Group - South Africa
- Ceylon Electricity Board - Sri Lanka
- Thai Mozambique Logistica
- Medco Energi Mining Internasional
- Planning Commission, India
- Borneo Indobara - Indonesia
- Orica Australia Pty. Ltd.
- Petrochimia International Co. Ltd.- Taiwan
- Globalindo Alam Lestari - Indonesia
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- Global Business Power Corporation, Philippines
- Thiess Contractors Indonesia
- PowerSource Philippines DevCo
- Chamber of Mines of South Africa
- Semirara Mining Corp, Philippines
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Price Waterhouse Coopers - Russia
- Bukit Asam (Persero) Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Coal and Oil Company - UAE
- Rashtriya Ispat Nigam Limited - India
- Baramulti Group, Indonesia
- SMC Global Power, Philippines
- Deloitte Consulting - India
- PNOC Exploration Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- London Commodity Brokers - England
- MS Steel International - UAE
- Kohat Cement Company Ltd. - Pakistan
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Rio Tinto Coal - Australia
- Coastal Gujarat Power Limited - India
- Petron Corporation, Philippines
- PTC India Limited - India
- Port Waratah Coal Services - Australia
- White Energy Company Limited
- Standard Chartered Bank - UAE
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- Kartika Selabumi Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Bulk Trading Sa - Switzerland
- Pendopo Energi Batubara - Indonesia
- Therma Luzon, Inc, Philippines
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- Toyota Tsusho Corporation, Japan
- Sarangani Energy Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
- Australian Coal Association
- Kapuas Tunggal Persada - Indonesia
- Latin American Coal - Colombia
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- SMG Consultants - Indonesia
- Jaiprakash Power Ventures ltd
- Kumho Petrochemical, South Korea
- Tamil Nadu electricity Board
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Economic Council, Georgia
- Maharashtra Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- TeaM Sual Corporation - Philippines
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- Altura Mining Limited, Indonesia
- Energy Development Corp, Philippines
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Romanian Commodities Exchange
- GMR Energy Limited - India
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- Riau Bara Harum - Indonesia
- Mjunction Services Limited - India
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Goldman Sachs - Singapore
- Sakthi Sugars Limited - India
- GAC Shipping (India) Pvt Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Barasentosa Lestari - Indonesia
- The Treasury - Australian Government
- CIMB Investment Bank - Malaysia
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- South Luzon Thermal Energy Corporation
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- Metalloyd Limited - United Kingdom
- Mintek Dendrill Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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