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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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Thursday, 19 November 09
FAST-TRACK FOCUS ON COAL POWER MAY COST INDONESIA BILLIONS
The Jakartaglobe reported that, As it begins to tap its massive coal reserves to generate cheap electricity, Indonesia may face additional costs of ...
Wednesday, 18 November 09
THAI PTT PLANS COAL MINE INVESTMENT IN INDONESIA
* To conclude Indonesian coal mine buy in 6 months
* Sees coal output jumping to 20 mln tonnes in five years
Reuters reported that, PTT , ...
Wednesday, 18 November 09
ASIA-PACIFIC MINISTERIAL CONFERENCE ON PUBLIC-PRIVATE PARTNERSHIPS FOR INFRASTRUCTURE DEVELOPMENT
“Building Asia’s Infrastructure”
COALspot.com (Indonesia) Press Release: Infrastructure Asia 2010 is Asia’s premier infra ...
Wednesday, 18 November 09
AMBUJA COAL TENDER PRICES EQUATE TO $61.50/T FOB
Reuters reported that, coal prices achieved by Indian cement maker Gujarat Ambuja in its early November tender equate to $61.50 a tonne FOB Richards ...
Tuesday, 17 November 09
JSW STEEL MAY SPEND $500 MILLION TO ACQUIRE COAL MINES OVERSEAS
JSW Steel Ltd., India’s third- biggest producer, may spend $500 million buying coal mines overseas, securing supplies for its local expansion. ...
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- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- Borneo Indobara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Sindya Power Generating Company Private Ltd
- Marubeni Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- Sinarmas Energy and Mining - Indonesia
- Antam Resourcindo - Indonesia
- Africa Commodities Group - South Africa
- Bayan Resources Tbk. - Indonesia
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- Global Green Power PLC Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- LBH Netherlands Bv - Netherlands
- Energy Development Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- ICICI Bank Limited - India
- Ministry of Transport, Egypt
- Jorong Barutama Greston.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Aboitiz Power Corporation - Philippines
- Cement Manufacturers Association - India
- Power Finance Corporation Ltd., India
- Planning Commission, India
- Miang Besar Coal Terminal - Indonesia
- Parry Sugars Refinery, India
- Semirara Mining Corp, Philippines
- Edison Trading Spa - Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Trasteel International SA, Italy
- Maheswari Brothers Coal Limited - India
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Central Electricity Authority - India
- Star Paper Mills Limited - India
- SMG Consultants - Indonesia
- Petron Corporation, Philippines
- Lanco Infratech Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
- PNOC Exploration Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Ambuja Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- Kideco Jaya Agung - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Tata Chemicals Ltd - India
- The University of Queensland
- Gujarat Sidhee Cement - India
- Sree Jayajothi Cements Limited - India
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- Price Waterhouse Coopers - Russia
- Karbindo Abesyapradhi - Indoneisa
- Minerals Council of Australia
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Electricity Generating Authority of Thailand
- Sojitz Corporation - Japan
- Sical Logistics Limited - India
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- Attock Cement Pakistan Limited
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- Tamil Nadu electricity Board
- Wood Mackenzie - Singapore
- SMC Global Power, Philippines
- Standard Chartered Bank - UAE
- Kartika Selabumi Mining - Indonesia
- Formosa Plastics Group - Taiwan
- CIMB Investment Bank - Malaysia
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Meenaskhi Energy Private Limited - India
- Madhucon Powers Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Deloitte Consulting - India
- Carbofer General Trading SA - India
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Merrill Lynch Commodities Europe
- Neyveli Lignite Corporation Ltd, - India
- Xindia Steels Limited - India
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- Australian Coal Association
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Salva Resources Pvt Ltd - India
- White Energy Company Limited
- Altura Mining Limited, Indonesia
- Central Java Power - Indonesia
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- Dalmia Cement Bharat India
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- Thai Mozambique Logistica
- Global Business Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Singapore Mercantile Exchange
- Banpu Public Company Limited - Thailand
- London Commodity Brokers - England
- PTC India Limited - India
- Manunggal Multi Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Larsen & Toubro Limited - India
- Jindal Steel & Power Ltd - India
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Karaikal Port Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Coalindo Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- ASAPP Information Group - India
- Baramulti Group, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Latin American Coal - Colombia
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- Grasim Industreis Ltd - India
- Bhatia International Limited - India
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- Siam City Cement PLC, Thailand
- Kumho Petrochemical, South Korea
- GAC Shipping (India) Pvt Ltd
- Globalindo Alam Lestari - Indonesia
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- Toyota Tsusho Corporation, Japan
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
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