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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, 13 November 09
API4 IGNORES LOW COAL TRADES - SWISS SINGAPORE
* Jan, Feb S.Africa coal prices hit 12-month highs
* Indian trader says deals done dollars below index
Reuters reported that, the physical coal ...
Thursday, 12 November 09
INDONESIA'S BUMI COAL PRODUCTION TO INCREASE
The sale is predicted to jump 14 percent to 58 million tons.
Viva News reported that, PT Bumi Resources Tbk. (BUMI) projected that the company's ...
Thursday, 12 November 09
INDIA'S BHEL IS IN INDONESIA NOW WITH THE COST EFFECTIVE CFBC BASED BOILER TURBINE PACKAGES
COALspot.com(Indonesia): BHEL, the largest engineering and manufacturing enterprise in India in the energy-related / infrastructure sector, is now f ...
Thursday, 12 November 09
NTPC FARAKKA AND KAHALGAON UNITS SHUT DOWN ON COAL SHORTAGE
Operations at two units each of power major NTPC Ltd’s 1600 MW Farakka and the 2340 MW Kahalgaon stations have ground to a halt due to an acut ...
Thursday, 12 November 09
GANGAVARAM PORT SETS RECORD BY DISCHARGING 80,514 TONNE OF COAL CARGO
Gangavaram Port, the deepest port in the country with water depth of 20 meters, has achieved an unprecedented milestone by discharging 80,514 metric ...
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- Madhucon Powers Ltd - India
- Siam City Cement - Thailand
- Sojitz Corporation - Japan
- Orica Mining Services - Indonesia
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Deloitte Consulting - India
- LBH Netherlands Bv - Netherlands
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- VISA Power Limited - India
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- Gujarat Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Straits Asia Resources Limited - Singapore
- Malabar Cements Ltd - India
- Dalmia Cement Bharat India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Sidhee Cement - India
- PowerSource Philippines DevCo
- Xindia Steels Limited - India
- London Commodity Brokers - England
- Uttam Galva Steels Limited - India
- Power Finance Corporation Ltd., India
- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- Directorate Of Revenue Intelligence - India
- Sindya Power Generating Company Private Ltd
- IEA Clean Coal Centre - UK
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- Central Electricity Authority - India
- Bukit Makmur.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Independent Power Producers Association of India
- The University of Queensland
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- MS Steel International - UAE
- Simpson Spence & Young - Indonesia
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Maheswari Brothers Coal Limited - India
- Wilmar Investment Holdings
- Rio Tinto Coal - Australia
- Oldendorff Carriers - Singapore
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Marubeni Corporation - India
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Kumho Petrochemical, South Korea
- The State Trading Corporation of India Ltd
- Videocon Industries ltd - India
- GVK Power & Infra Limited - India
- Cement Manufacturers Association - India
- Kartika Selabumi Mining - Indonesia
- ICICI Bank Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Makarim & Taira - Indonesia
- Meralco Power Generation, Philippines
- Chettinad Cement Corporation Ltd - India
- Intertek Mineral Services - Indonesia
- Mercator Lines Limited - India
- Agrawal Coal Company - India
- Chamber of Mines of South Africa
- Lanco Infratech Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Essar Steel Hazira Ltd - India
- Globalindo Alam Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Aboitiz Power Corporation - Philippines
- Renaissance Capital - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Leighton Contractors Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Parliament of New Zealand
- Savvy Resources Ltd - HongKong
- Indonesian Coal Mining Association
- Aditya Birla Group - India
- Heidelberg Cement - Germany
- Bulk Trading Sa - Switzerland
- Parry Sugars Refinery, India
- Mintek Dendrill Indonesia
- CNBM International Corporation - China
- White Energy Company Limited
- Karaikal Port Pvt Ltd - India
- Trasteel International SA, Italy
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- Binh Thuan Hamico - Vietnam
- Siam City Cement PLC, Thailand
- Billiton Holdings Pty Ltd - Australia
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- SMG Consultants - Indonesia
- Bangladesh Power Developement Board
- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- Ministry of Transport, Egypt
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- South Luzon Thermal Energy Corporation
- Sree Jayajothi Cements Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Meenaskhi Energy Private Limited - India
- Attock Cement Pakistan Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Interocean Group of Companies - India
- Baramulti Group, Indonesia
- Latin American Coal - Colombia
- Coal and Oil Company - UAE
- Ind-Barath Power Infra Limited - India
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- India Bulls Power Limited - India
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Riau Bara Harum - Indonesia
- GAC Shipping (India) Pvt Ltd
- GMR Energy Limited - India
- Romanian Commodities Exchange
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- Carbofer General Trading SA - India
- Electricity Authority, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Kobexindo Tractors - Indoneisa
- Eastern Coal Council - USA
- PTC India Limited - India
- Mjunction Services Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Anglo American - United Kingdom
- Minerals Council of Australia
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Wood Mackenzie - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Bhatia International Limited - India
- Star Paper Mills Limited - India
- Planning Commission, India
- Kapuas Tunggal Persada - Indonesia
- Eastern Energy - Thailand
- Jaiprakash Power Ventures ltd
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- TeaM Sual Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- Jindal Steel & Power Ltd - India
- Mercuria Energy - Indonesia
- Ambuja Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Price Waterhouse Coopers - Russia
- SN Aboitiz Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- The Treasury - Australian Government
- Australian Commodity Traders Exchange
- Neyveli Lignite Corporation Ltd, - India
- Kohat Cement Company Ltd. - Pakistan
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
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