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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, 12 November 09
FOREIGN INVESTMENT IN RUSSIAN COAL SECTOR
Reuters reported that, Russia's coal mines, particularly in the Arctic and Far East, are attracting interest from foreign investors as commodity pr ...
Thursday, 12 November 09
BANPU TO INVEST US$ 466 M
Plan targets 33.5m tonnes of coal per year
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, is planning capital investments of ...
Wednesday, 11 November 09
NORTHSTAR TAKES 40 PER CENT OF INDONESIAN MINING COMPANY
AltAssets reported that, PT Northstar Pacific Partners, the Indonesian affiliate of US private equity firm TPG, has taken a 40 per cent stake in Ind ...
Wednesday, 11 November 09
INDONESIAN COAL MINERS SOLD BIG VOLUMES OF 2010 TO CHINA
* China has scooped up large volumes of Indonesian coal
* Total exports to China in 2010 seen to exceed 20 million T
* Chinese, Indian demand may ...
Wednesday, 11 November 09
INDIAN COAL IMPORT FROM SA IN OCTOBER
Reuters reported that India imported 2.4 million tonnes of coal from South Africa's Richards Bay Coal Terminal in October 2009, 35% of the total of ...
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- Deloitte Consulting - India
- Pipit Mutiara Jaya. PT, Indonesia
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- New Zealand Coal & Carbon
- Baramulti Group, Indonesia
- Mjunction Services Limited - India
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- Latin American Coal - Colombia
- Energy Development Corp, Philippines
- Samtan Co., Ltd - South Korea
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- Global Green Power PLC Corporation, Philippines
- White Energy Company Limited
- Ambuja Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kobexindo Tractors - Indoneisa
- Star Paper Mills Limited - India
- Rio Tinto Coal - Australia
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Intertek Mineral Services - Indonesia
- Savvy Resources Ltd - HongKong
- Jindal Steel & Power Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Kalimantan Lumbung Energi - Indonesia
- London Commodity Brokers - England
- Sarangani Energy Corporation, Philippines
- Posco Energy - South Korea
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- Maheswari Brothers Coal Limited - India
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- GMR Energy Limited - India
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- India Bulls Power Limited - India
- Central Java Power - Indonesia
- SMC Global Power, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- Formosa Plastics Group - Taiwan
- Banpu Public Company Limited - Thailand
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- Antam Resourcindo - Indonesia
- Simpson Spence & Young - Indonesia
- Central Electricity Authority - India
- Karaikal Port Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- GAC Shipping (India) Pvt Ltd
- Sical Logistics Limited - India
- Billiton Holdings Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- Bhoruka Overseas - Indonesia
- MS Steel International - UAE
- Leighton Contractors Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Global Coal Blending Company Limited - Australia
- Directorate Of Revenue Intelligence - India
- Semirara Mining and Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Anglo American - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- Maharashtra Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- Manunggal Multi Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Aditya Birla Group - India
- Standard Chartered Bank - UAE
- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- ICICI Bank Limited - India
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- Kideco Jaya Agung - Indonesia
- Chamber of Mines of South Africa
- SN Aboitiz Power Inc, Philippines
- SMG Consultants - Indonesia
- Petron Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- The University of Queensland
- Madhucon Powers Ltd - India
- Toyota Tsusho Corporation, Japan
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Ceylon Electricity Board - Sri Lanka
- Directorate General of MIneral and Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- Georgia Ports Authority, United States
- Globalindo Alam Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Jaiprakash Power Ventures ltd
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Indogreen Group - Indonesia
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Siam City Cement PLC, Thailand
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- South Luzon Thermal Energy Corporation
- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- Mercuria Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Tamil Nadu electricity Board
- PowerSource Philippines DevCo
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Coal Association
- Grasim Industreis Ltd - India
- Orica Mining Services - Indonesia
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- The Treasury - Australian Government
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Africa Commodities Group - South Africa
- Cement Manufacturers Association - India
- Marubeni Corporation - India
- Coalindo Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Coal and Oil Company - UAE
- Semirara Mining Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- Sree Jayajothi Cements Limited - India
- Ministry of Transport, Egypt
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Planning Commission, India
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- PTC India Limited - India
- Therma Luzon, Inc, Philippines
- Sojitz Corporation - Japan
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- Siam City Cement - Thailand
- PNOC Exploration Corporation - Philippines
- Bangladesh Power Developement Board
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Aboitiz Power Corporation - Philippines
- Videocon Industries ltd - India
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Karbindo Abesyapradhi - Indoneisa
- Merrill Lynch Commodities Europe
- ASAPP Information Group - India
- Sindya Power Generating Company Private Ltd
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- Kapuas Tunggal Persada - Indonesia
- Minerals Council of Australia
- Straits Asia Resources Limited - Singapore
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
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