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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, 04 November 09
BINANI HOPES TO BUY INDONESIAN COAL MINE IN 2-3 MONTHS
"We are still negotiating, but hope to conclude the deal in the next two to three months," Binani Cement Managing Director Vinod Juneja to ...
Tuesday, 03 November 09
CHINA TO BE NET COAL IMPORTER IN 2009
China is accelerating its importation of coal to cope with fallen output caused by the consolidation of small coalmines, and is likely to become a n ...
Monday, 02 November 09
RIO TINTO WARNS ON CHEAP MONGOLIAN COAL
The Age reported that, Mining giant Rio Tinto has warned that cheap coal from Mongolia as well as congestion at the Port of Newcastle in NSW could u ...
Monday, 02 November 09
ESSAR SEEKS COAL ASSETS IN SOUTH AFRICA
Paguntaka reported that, Essar Group plans to acquire coal assets in South Africa to help boost its power business in India. A senior executive of E ...
Sunday, 01 November 09
MINES REGULATION AMENDMENT BILL TO BE TABLED IN PARLIAMENT
Thaindia News reported that, A bill seeking to amend the Mines and Minerals Development Regulation Act, 1957, will be introduced in the winter sessi ...
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- CNBM International Corporation - China
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- Mercuria Energy - Indonesia
- Independent Power Producers Association of India
- Rashtriya Ispat Nigam Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- Aboitiz Power Corporation - Philippines
- Economic Council, Georgia
- India Bulls Power Limited - India
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Trasteel International SA, Italy
- Salva Resources Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Borneo Indobara - Indonesia
- Kumho Petrochemical, South Korea
- Iligan Light & Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Heidelberg Cement - Germany
- Jorong Barutama Greston.PT - Indonesia
- Latin American Coal - Colombia
- Gujarat Electricity Regulatory Commission - India
- Minerals Council of Australia
- Banpu Public Company Limited - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- GMR Energy Limited - India
- The University of Queensland
- Port Waratah Coal Services - Australia
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Baiduri Energy - Indonesia
- Thiess Contractors Indonesia
- Sinarmas Energy and Mining - Indonesia
- Indogreen Group - Indonesia
- Sindya Power Generating Company Private Ltd
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Kobexindo Tractors - Indoneisa
- Central Java Power - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Makarim & Taira - Indonesia
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- GAC Shipping (India) Pvt Ltd
- Anglo American - United Kingdom
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- Meralco Power Generation, Philippines
- Karaikal Port Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Coalindo Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- International Coal Ventures Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Parry Sugars Refinery, India
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Sical Logistics Limited - India
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Goldman Sachs - Singapore
- Electricity Generating Authority of Thailand
- Grasim Industreis Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- ASAPP Information Group - India
- Vedanta Resources Plc - India
- Indian Energy Exchange, India
- Power Finance Corporation Ltd., India
- Global Business Power Corporation, Philippines
- VISA Power Limited - India
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Energy Link Ltd, New Zealand
- Coal and Oil Company - UAE
- MS Steel International - UAE
- Renaissance Capital - South Africa
- Kapuas Tunggal Persada - Indonesia
- Bharathi Cement Corporation - India
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- Ambuja Cements Ltd - India
- Vizag Seaport Private Limited - India
- Posco Energy - South Korea
- Ministry of Finance - Indonesia
- Directorate Of Revenue Intelligence - India
- Carbofer General Trading SA - India
- Meenaskhi Energy Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- Africa Commodities Group - South Africa
- ICICI Bank Limited - India
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- Singapore Mercantile Exchange
- Ind-Barath Power Infra Limited - India
- Videocon Industries ltd - India
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- Malabar Cements Ltd - India
- London Commodity Brokers - England
- Sree Jayajothi Cements Limited - India
- Coastal Gujarat Power Limited - India
- Indika Energy - Indonesia
- Ministry of Transport, Egypt
- European Bulk Services B.V. - Netherlands
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- Savvy Resources Ltd - HongKong
- Eastern Energy - Thailand
- Kideco Jaya Agung - Indonesia
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Xindia Steels Limited - India
- Mercator Lines Limited - India
- PowerSource Philippines DevCo
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- Kaltim Prima Coal - Indonesia
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- Central Electricity Authority - India
- Maheswari Brothers Coal Limited - India
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- Metalloyd Limited - United Kingdom
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Bhushan Steel Limited - India
- Intertek Mineral Services - Indonesia
- Australian Coal Association
- TNB Fuel Sdn Bhd - Malaysia
- Oldendorff Carriers - Singapore
- Energy Development Corp, Philippines
- PTC India Limited - India
- Wilmar Investment Holdings
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Planning Commission, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Interocean Group of Companies - India
- Georgia Ports Authority, United States
- Global Coal Blending Company Limited - Australia
- Jaiprakash Power Ventures ltd
- Jindal Steel & Power Ltd - India
- Electricity Authority, New Zealand
- Lanco Infratech Ltd - India
- Siam City Cement - Thailand
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- Maharashtra Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMG Consultants - Indonesia
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhatia International Limited - India
- Mintek Dendrill Indonesia
- Chamber of Mines of South Africa
- Attock Cement Pakistan Limited
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- Binh Thuan Hamico - Vietnam
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