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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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Sunday, 22 November 09
SHORT PERIOD RATES FOR SUPRAMAX WAS AT US$ 25,000/26,000 PER DAY FOR VESSELS OPENING FAR EAST / SE ASIA - VISTAAR ANALYSIS
COALspot.com (Singapore): Analyised by Capt. Radhakrishnan Reddy, Managing Director of Vistaar Shipping Services, Singapore.
BDI hits a new high ...
Friday, 20 November 09
INDONESIA UNITED TRACTORS PLANS $430 MLN CAPEX IN 2010
Reuters reported that, Indonesian heavy equipment distributor and mining contractor PT United Tractors Tbk plans capital expenditure of $430 million ...
Friday, 20 November 09
DRY BULK SHIP OWNERS HOPE RALLY WILL LAST
Boon times are still on the daily agenda of every dry bulk ship owner these days after one of the toughest year in the industry’s century-old ...
Friday, 20 November 09
NTPC LOOKING FOR LONG TERM CONTRACTS FOR COAL IMPORT
Business Standard of India reported that, State run power firm NTPC today said it is looking for long-term supply of coal from overseas market to me ...
Friday, 20 November 09
CHINESE COKING COAL SUPPLY TO BE 'TIGHT' IN 2010, KGI SAYS
Bloomberg Reported that, Stephen Wang, an analyst with KGI Securities in Taipei, comments on the outlook for Chinese steel production and demand for ...
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- Bukit Baiduri Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Indonesian Coal Mining Association
- Jindal Steel & Power Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- Africa Commodities Group - South Africa
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- Kaltim Prima Coal - Indonesia
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- Meralco Power Generation, Philippines
- The University of Queensland
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- Baramulti Group, Indonesia
- Electricity Generating Authority of Thailand
- Coalindo Energy - Indonesia
- Ministry of Transport, Egypt
- Chettinad Cement Corporation Ltd - India
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Aditya Birla Group - India
- Ambuja Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Xindia Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Lanco Infratech Ltd - India
- Deloitte Consulting - India
- Vedanta Resources Plc - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Therma Luzon, Inc, Philippines
- ASAPP Information Group - India
- Standard Chartered Bank - UAE
- Sree Jayajothi Cements Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Commonwealth Bank - Australia
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Trasteel International SA, Italy
- Toyota Tsusho Corporation, Japan
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- Semirara Mining and Power Corporation, Philippines
- Parliament of New Zealand
- Krishnapatnam Port Company Ltd. - India
- Thiess Contractors Indonesia
- GMR Energy Limited - India
- Borneo Indobara - Indonesia
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Bhushan Steel Limited - India
- Central Electricity Authority - India
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- Wilmar Investment Holdings
- Economic Council, Georgia
- San Jose City I Power Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- OPG Power Generation Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Interocean Group of Companies - India
- Cement Manufacturers Association - India
- Larsen & Toubro Limited - India
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- Bhoruka Overseas - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- MS Steel International - UAE
- Bharathi Cement Corporation - India
- Riau Bara Harum - Indonesia
- Star Paper Mills Limited - India
- Singapore Mercantile Exchange
- GAC Shipping (India) Pvt Ltd
- Uttam Galva Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Rio Tinto Coal - Australia
- Ind-Barath Power Infra Limited - India
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Price Waterhouse Coopers - Russia
- IEA Clean Coal Centre - UK
- Essar Steel Hazira Ltd - India
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Bayan Resources Tbk. - Indonesia
- Tata Chemicals Ltd - India
- Intertek Mineral Services - Indonesia
- New Zealand Coal & Carbon
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- Sical Logistics Limited - India
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- The State Trading Corporation of India Ltd
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- Indogreen Group - Indonesia
- Siam City Cement - Thailand
- Ministry of Mines - Canada
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- European Bulk Services B.V. - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Kumho Petrochemical, South Korea
- Central Java Power - Indonesia
- Dalmia Cement Bharat India
- Vijayanagar Sugar Pvt Ltd - India
- Tamil Nadu electricity Board
- Pendopo Energi Batubara - Indonesia
- Anglo American - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Directorate Of Revenue Intelligence - India
- Aboitiz Power Corporation - Philippines
- Indika Energy - Indonesia
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- Attock Cement Pakistan Limited
- Videocon Industries ltd - India
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- India Bulls Power Limited - India
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- Planning Commission, India
- Kohat Cement Company Ltd. - Pakistan
- Minerals Council of Australia
- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- Malabar Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Jaiprakash Power Ventures ltd
- Karbindo Abesyapradhi - Indoneisa
- PTC India Limited - India
- Gujarat Sidhee Cement - India
- Kobexindo Tractors - Indoneisa
- Sarangani Energy Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Romanian Commodities Exchange
- Coastal Gujarat Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- South Luzon Thermal Energy Corporation
- PNOC Exploration Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Karaikal Port Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- Binh Thuan Hamico - Vietnam
- TeaM Sual Corporation - Philippines
- Agrawal Coal Company - India
- Carbofer General Trading SA - India
- McConnell Dowell - Australia
- Sakthi Sugars Limited - India
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- Eastern Energy - Thailand
- Mjunction Services Limited - India
- ICICI Bank Limited - India
- IHS Mccloskey Coal Group - USA
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- Renaissance Capital - South Africa
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