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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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Saturday, 07 November 09
THE STEAM COAL MOVEMENT FROM INDONESIA TO INDIA REMAINED QUITE STRONG - CAPT. REDDY
COALspot.com (Singapore): The BDI continued rising this week and was up by 290 points up by almost 9 pct and the index closed at 3,393 points.
B ...
Friday, 06 November 09
COAL INDIA ABANDONS PLAN TO BUY ASSET IN AUSTRALIA
Coal India’s efforts to acquire a mid-sized virgin thermal coal block from a private party in Australia have drawn a blank.
The effort was ...
Friday, 06 November 09
NEW ASSETS WILL INCREASE COKING AND THERMAL COAL PRODUCTION
Coal and metals processing company Coal of Africa Limited (CoAL) aims to produce 10-million tons a year of coking coal and two-million tons a year o ...
Friday, 06 November 09
NTPC TO APPOINT MERCHANT BANKER FOR S AFRICA COAL MINE
State-run power producer NTPC, which is eyeing coal mines in South Africa to meet the gap in domestic fuel supply, will appoint a merchant banker ne ...
Thursday, 05 November 09
MERCATOR LINES AIMS TO BECOME A $5 BILLION COMPANY
Mercator Lines, India’s second largest private sector shipping line, plans to invest and expand, riding India’s next wave of growth, the ...
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- Uttam Galva Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Tamil Nadu electricity Board
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Jindal Steel & Power Ltd - India
- Bhatia International Limited - India
- Kapuas Tunggal Persada - Indonesia
- Wood Mackenzie - Singapore
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- The University of Queensland
- Jaiprakash Power Ventures ltd
- Trasteel International SA, Italy
- Eastern Energy - Thailand
- Agrawal Coal Company - India
- Bayan Resources Tbk. - Indonesia
- Toyota Tsusho Corporation, Japan
- Gujarat Sidhee Cement - India
- Global Green Power PLC Corporation, Philippines
- Edison Trading Spa - Italy
- Essar Steel Hazira Ltd - India
- London Commodity Brokers - England
- McConnell Dowell - Australia
- Ministry of Finance - Indonesia
- Central Java Power - Indonesia
- Minerals Council of Australia
- Siam City Cement PLC, Thailand
- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- GN Power Mariveles Coal Plant, Philippines
- Merrill Lynch Commodities Europe
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Australian Coal Association
- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Baramulti Group, Indonesia
- Madhucon Powers Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Georgia Ports Authority, United States
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Orica Australia Pty. Ltd.
- Indian Energy Exchange, India
- Medco Energi Mining Internasional
- CNBM International Corporation - China
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- Karaikal Port Pvt Ltd - India
- Commonwealth Bank - Australia
- Goldman Sachs - Singapore
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Maheswari Brothers Coal Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- LBH Netherlands Bv - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Sree Jayajothi Cements Limited - India
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- Bhushan Steel Limited - India
- ICICI Bank Limited - India
- AsiaOL BioFuels Corp., Philippines
- Sindya Power Generating Company Private Ltd
- Semirara Mining and Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Tata Chemicals Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Videocon Industries ltd - India
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- Riau Bara Harum - Indonesia
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Oil Corporation Limited
- Eastern Coal Council - USA
- Indogreen Group - Indonesia
- Banpu Public Company Limited - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cement Manufacturers Association - India
- Bukit Asam (Persero) Tbk - Indonesia
- Rio Tinto Coal - Australia
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- CIMB Investment Bank - Malaysia
- Vedanta Resources Plc - India
- Vizag Seaport Private Limited - India
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Independent Power Producers Association of India
- Renaissance Capital - South Africa
- Mjunction Services Limited - India
- VISA Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- SMC Global Power, Philippines
- Malabar Cements Ltd - India
- Planning Commission, India
- Parliament of New Zealand
- White Energy Company Limited
- Dalmia Cement Bharat India
- Parry Sugars Refinery, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- Lanco Infratech Ltd - India
- Indo Tambangraya Megah - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- The State Trading Corporation of India Ltd
- Carbofer General Trading SA - India
- Anglo American - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- Bharathi Cement Corporation - India
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Siam City Cement - Thailand
- Ind-Barath Power Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- Barasentosa Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Makarim & Taira - Indonesia
- Iligan Light & Power Inc, Philippines
- Electricity Authority, New Zealand
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- Economic Council, Georgia
- European Bulk Services B.V. - Netherlands
- Petron Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Antam Resourcindo - Indonesia
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- Therma Luzon, Inc, Philippines
- Mercator Lines Limited - India
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- SMG Consultants - Indonesia
- Indika Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Bangladesh Power Developement Board
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- Indonesian Coal Mining Association
- PTC India Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- Star Paper Mills Limited - India
- Kumho Petrochemical, South Korea
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- Formosa Plastics Group - Taiwan
- ASAPP Information Group - India
- Ministry of Mines - Canada
- GVK Power & Infra Limited - India
- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- SN Aboitiz Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- Kepco SPC Power Corporation, Philippines
- Coalindo Energy - Indonesia
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