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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, 20 November 09
INDONESIAN CO PLANS JV WITH NAGARJUNA
Economic Times reported that, Infrastructure firm Nagarjuna Constructions Company (NCC) is set to form a joint venture with an Indonesian coal minin ...
Thursday, 19 November 09
S. KOREA TO BUY COAL FROM CHINA FOR US$ 85-90/T IN 2010
Head of one S. Korea power company on November 18 unveiled that S. Korea’s power companies may purchase coal from China at the contract price ...
Thursday, 19 November 09
SNAPSHOT OF INDONESIA'S COAL INDUSTRY - FACT BOX BY REUTERS
Indonesian plans to cap coal exports to meet domestic demand will not hit global supplies in the near term, but could start to bite in three to five ...
Thursday, 19 November 09
INDONESIA COAL EXPORTS CURB WILL TAKE TIME TO BITE
Indonesia's plans to cap coal exports to satisfy demand at home are unlikely to crimp global supplies for as long as five years, when new power pla ...
Thursday, 19 November 09
THE GOVERNMENT TO GUARANTEE COAL SUPPLIES FOR POWER PLANTS
The government guarantees coal supplies for power plants under a 10,000 MW-capacity power plant construction acceleration program.
Minister of En ...
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- TNB Fuel Sdn Bhd - Malaysia
- Kideco Jaya Agung - Indonesia
- Posco Energy - South Korea
- OPG Power Generation Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- India Bulls Power Limited - India
- Parliament of New Zealand
- Edison Trading Spa - Italy
- Baramulti Group, Indonesia
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Madhucon Powers Ltd - India
- Central Java Power - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- PNOC Exploration Corporation - Philippines
- Indian Energy Exchange, India
- SMG Consultants - Indonesia
- Attock Cement Pakistan Limited
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- Directorate Of Revenue Intelligence - India
- Bukit Makmur.PT - Indonesia
- Thiess Contractors Indonesia
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- Coal and Oil Company - UAE
- Bukit Baiduri Energy - Indonesia
- Vedanta Resources Plc - India
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mintek Dendrill Indonesia
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- VISA Power Limited - India
- CNBM International Corporation - China
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- GVK Power & Infra Limited - India
- Samtan Co., Ltd - South Korea
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- Malabar Cements Ltd - India
- Indika Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- McConnell Dowell - Australia
- Economic Council, Georgia
- Carbofer General Trading SA - India
- Anglo American - United Kingdom
- Sakthi Sugars Limited - India
- International Coal Ventures Pvt Ltd - India
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- Africa Commodities Group - South Africa
- Bulk Trading Sa - Switzerland
- London Commodity Brokers - England
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- Power Finance Corporation Ltd., India
- Karbindo Abesyapradhi - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Bangladesh Power Developement Board
- Tata Chemicals Ltd - India
- Singapore Mercantile Exchange
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Latin American Coal - Colombia
- Savvy Resources Ltd - HongKong
- Bhatia International Limited - India
- Maheswari Brothers Coal Limited - India
- Miang Besar Coal Terminal - Indonesia
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Sarangani Energy Corporation, Philippines
- SMC Global Power, Philippines
- LBH Netherlands Bv - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Global Coal Blending Company Limited - Australia
- Global Business Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- Barasentosa Lestari - Indonesia
- Merrill Lynch Commodities Europe
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Indian Oil Corporation Limited
- TeaM Sual Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Pendopo Energi Batubara - Indonesia
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Standard Chartered Bank - UAE
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Coalindo Energy - Indonesia
- Orica Mining Services - Indonesia
- Indogreen Group - Indonesia
- Simpson Spence & Young - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Renaissance Capital - South Africa
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- Straits Asia Resources Limited - Singapore
- Eastern Coal Council - USA
- White Energy Company Limited
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Uttam Galva Steels Limited - India
- Grasim Industreis Ltd - India
- Romanian Commodities Exchange
- Wood Mackenzie - Singapore
- Meenaskhi Energy Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- Siam City Cement - Thailand
- Videocon Industries ltd - India
- Interocean Group of Companies - India
- Port Waratah Coal Services - Australia
- The Treasury - Australian Government
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- Intertek Mineral Services - Indonesia
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- Aboitiz Power Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Mercator Lines Limited - India
- Sojitz Corporation - Japan
- The University of Queensland
- PTC India Limited - India
- Global Green Power PLC Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Oldendorff Carriers - Singapore
- Banpu Public Company Limited - Thailand
- IHS Mccloskey Coal Group - USA
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Altura Mining Limited, Indonesia
- Australian Commodity Traders Exchange
- Toyota Tsusho Corporation, Japan
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
- Dalmia Cement Bharat India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thai Mozambique Logistica
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Manunggal Multi Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Minerals Council of Australia
- Kaltim Prima Coal - Indonesia
- Australian Coal Association
- Coastal Gujarat Power Limited - India
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Ministry of Finance - Indonesia
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- New Zealand Coal & Carbon
- European Bulk Services B.V. - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Iligan Light & Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Trasteel International SA, Italy
- Eastern Energy - Thailand
- Agrawal Coal Company - India
- Kepco SPC Power Corporation, Philippines
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