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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, 05 November 09
HMS BERGBAU AG OPENING INDIAN OFFICE
Further step on internationalization track Office in Mumbai Participation in demand for coal imports
HMS Bergbau AG, is an international coal tra ...
Thursday, 05 November 09
SAM'S SEAFOOD HOLDINGS MOVES STEP CLOSER TO COAL EXPLORATION IN INDONESIA
Sam’s Seafood Holdings Limited, which is proposed to be renamed Pan Asia Corporation Limited, is moving closer to becoming an exploration and ...
Wednesday, 04 November 09
INDONESIA CAP ON COAL EXPORTS MAY HIT INDIAN POWER SECTOR
BL reported that Karnataka power sector is likely to be partially impacted by the Indonesian Government move to restrict coal exports.
Private se ...
Wednesday, 04 November 09
SA 2010 COAL EXPORTS SEEN AT 65M TO 68M TONS - ANALYSTS
South Africa's thermal coal exports could rise to as high as 68 million tonnes in 2010 but are more likely to be 64-65 million compared to 60 milli ...
Wednesday, 04 November 09
BAKRIE MAY WIN BERAU COAL BID FROM ARMADIAN
The Bakrie group is likely to be selected as buyer of PT Berau Coal, the country’s fifth-largest coal producer, two people familiar with the m ...
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- Heidelberg Cement - Germany
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- Ministry of Transport, Egypt
- Leighton Contractors Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- CIMB Investment Bank - Malaysia
- Indogreen Group - Indonesia
- Dalmia Cement Bharat India
- Makarim & Taira - Indonesia
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- Xindia Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Bangladesh Power Developement Board
- Manunggal Multi Energi - Indonesia
- Bhushan Steel Limited - India
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- VISA Power Limited - India
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- MS Steel International - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Ministry of Finance - Indonesia
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- Coalindo Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- The Treasury - Australian Government
- Intertek Mineral Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Formosa Plastics Group - Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- White Energy Company Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- Romanian Commodities Exchange
- Independent Power Producers Association of India
- Mintek Dendrill Indonesia
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- Siam City Cement - Thailand
- Malabar Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Marubeni Corporation - India
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Business Power Corporation, Philippines
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Tamil Nadu electricity Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Planning Commission, India
- Kalimantan Lumbung Energi - Indonesia
- Kumho Petrochemical, South Korea
- Singapore Mercantile Exchange
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Deloitte Consulting - India
- PTC India Limited - India
- Straits Asia Resources Limited - Singapore
- Bharathi Cement Corporation - India
- European Bulk Services B.V. - Netherlands
- Africa Commodities Group - South Africa
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Meralco Power Generation, Philippines
- ASAPP Information Group - India
- Sarangani Energy Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- Bhatia International Limited - India
- Orica Mining Services - Indonesia
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining and Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GMR Energy Limited - India
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- Alfred C Toepfer International GmbH - Germany
- Energy Link Ltd, New Zealand
- Bukit Makmur.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Indian Oil Corporation Limited
- Cigading International Bulk Terminal - Indonesia
- GVK Power & Infra Limited - India
- Grasim Industreis Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Posco Energy - South Korea
- Central Java Power - Indonesia
- Attock Cement Pakistan Limited
- Standard Chartered Bank - UAE
- Sinarmas Energy and Mining - Indonesia
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- Vedanta Resources Plc - India
- Kaltim Prima Coal - Indonesia
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- Tata Chemicals Ltd - India
- Timah Investasi Mineral - Indoneisa
- Medco Energi Mining Internasional
- Power Finance Corporation Ltd., India
- Economic Council, Georgia
- Edison Trading Spa - Italy
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- London Commodity Brokers - England
- Georgia Ports Authority, United States
- Simpson Spence & Young - Indonesia
- Iligan Light & Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- Directorate Of Revenue Intelligence - India
- Thai Mozambique Logistica
- Maheswari Brothers Coal Limited - India
- SMG Consultants - Indonesia
- Mjunction Services Limited - India
- Agrawal Coal Company - India
- Petrochimia International Co. Ltd.- Taiwan
- Directorate General of MIneral and Coal - Indonesia
- IEA Clean Coal Centre - UK
- Savvy Resources Ltd - HongKong
- Bulk Trading Sa - Switzerland
- Parry Sugars Refinery, India
- Latin American Coal - Colombia
- Globalindo Alam Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- Salva Resources Pvt Ltd - India
- Rio Tinto Coal - Australia
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- The State Trading Corporation of India Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Parliament of New Zealand
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Holcim Trading Pte Ltd - Singapore
- Indika Energy - Indonesia
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- Karaikal Port Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Barasentosa Lestari - Indonesia
- Sical Logistics Limited - India
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercuria Energy - Indonesia
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- Jorong Barutama Greston.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Semirara Mining Corp, Philippines
- Larsen & Toubro Limited - India
- Global Green Power PLC Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Aditya Birla Group - India
- Sakthi Sugars Limited - India
- Sindya Power Generating Company Private Ltd
- The University of Queensland
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
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