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