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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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Wednesday, 11 November 09
INDONESIA ASKS DOMESTIC COAL FIRMS TO SET ASIDE 30PCT OF OUTPUT
Indonesian government said that it had asked domestic coal producers to set aside 30% of their output next year to meet demand from new coal fired p ...
Wednesday, 11 November 09
MINING ACQUISITIONS BECOMING MORE STRATEGIC - E&Y
Mining Weekly reported that, Although miners around the world are looking to position themselves for growth, companies are being more selective when ...
Tuesday, 10 November 09
THAI COAL MINER BANPU Q3 NET UP, BEATS FORECAST
Reuters reported that, Thailand's top coal miner, Banpu, said on Tuesday its third-quarter net earnings rose a higher-than-expected 22 percent, hel ...
Monday, 09 November 09
NAPOCOR DEFERS 50,000 T COAL TENDER
Top Philippine electricity producer National Power Corp. (Napocor) has indefinitely postponed a tender for supply of 50,000 tons of steam coal sched ...
Monday, 09 November 09
SAM'S SEAFOOD HOLDINGS SET TO COMMENCE DRILLING AT INDONESIAN COAL PROJECT
Proactive Investors reported that, Sam's Seafood Holdings is preparing to kick off diamond drilling at the company's Indonesian coal project after ...
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- Aboitiz Power Corporation - Philippines
- Electricity Authority, New Zealand
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wood Mackenzie - Singapore
- Commonwealth Bank - Australia
- Mjunction Services Limited - India
- Thai Mozambique Logistica
- Kumho Petrochemical, South Korea
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- Sree Jayajothi Cements Limited - India
- PowerSource Philippines DevCo
- Gujarat Mineral Development Corp Ltd - India
- Kobexindo Tractors - Indoneisa
- ICICI Bank Limited - India
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- Anglo American - United Kingdom
- The Treasury - Australian Government
- GAC Shipping (India) Pvt Ltd
- Borneo Indobara - Indonesia
- Renaissance Capital - South Africa
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- Star Paper Mills Limited - India
- Uttam Galva Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- The University of Queensland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- Pendopo Energi Batubara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- Goldman Sachs - Singapore
- The State Trading Corporation of India Ltd
- Lanco Infratech Ltd - India
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Samtan Co., Ltd - South Korea
- Kaltim Prima Coal - Indonesia
- India Bulls Power Limited - India
- Coalindo Energy - Indonesia
- Bhatia International Limited - India
- Posco Energy - South Korea
- Malabar Cements Ltd - India
- London Commodity Brokers - England
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Savvy Resources Ltd - HongKong
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- Karaikal Port Pvt Ltd - India
- Parliament of New Zealand
- Interocean Group of Companies - India
- Tamil Nadu electricity Board
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Attock Cement Pakistan Limited
- Electricity Generating Authority of Thailand
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- Mintek Dendrill Indonesia
- Grasim Industreis Ltd - India
- Parry Sugars Refinery, India
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- PTC India Limited - India
- Independent Power Producers Association of India
- Central Electricity Authority - India
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Economic Council, Georgia
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- SMC Global Power, Philippines
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Heidelberg Cement - Germany
- Deloitte Consulting - India
- Metalloyd Limited - United Kingdom
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Global Coal Blending Company Limited - Australia
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- ASAPP Information Group - India
- Larsen & Toubro Limited - India
- VISA Power Limited - India
- Ministry of Finance - Indonesia
- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- GMR Energy Limited - India
- Bayan Resources Tbk. - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- Holcim Trading Pte Ltd - Singapore
- European Bulk Services B.V. - Netherlands
- Cement Manufacturers Association - India
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Offshore Bulk Terminal Pte Ltd, Singapore
- International Coal Ventures Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Minerals Council of Australia
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Petron Corporation, Philippines
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- Semirara Mining Corp, Philippines
- Barasentosa Lestari - Indonesia
- Bangladesh Power Developement Board
- Carbofer General Trading SA - India
- Simpson Spence & Young - Indonesia
- Thiess Contractors Indonesia
- Marubeni Corporation - India
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercuria Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Indika Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Agrawal Coal Company - India
- Globalindo Alam Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Baiduri Energy - Indonesia
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- Vijayanagar Sugar Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- Trasteel International SA, Italy
- CNBM International Corporation - China
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Planning Commission, India
- Miang Besar Coal Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Aditya Birla Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Rio Tinto Coal - Australia
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- Directorate Of Revenue Intelligence - India
- Indo Tambangraya Megah - Indonesia
- Intertek Mineral Services - Indonesia
- Chamber of Mines of South Africa
- Global Green Power PLC Corporation, Philippines
- Georgia Ports Authority, United States
- South Luzon Thermal Energy Corporation
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kideco Jaya Agung - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
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