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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, 31 October 09
FLSMIDTH WINS MAJOR INDIAN COAL HANDLING PROJECT
Top global supplier of minerals processing and materials handling equipment, FL smidth, has won another important coal handling contract in India
...
Saturday, 31 October 09
INDIA OPENING POWER SECTOR TO PRIVATE INVESTMENT, COAL STILL THE FUEL OF CHOICE
Energy Tribune reported that, With coal-fired power plants as the primary source, India’s electricity generation sector space has been dominat ...
Friday, 30 October 09
MINERS TOLD TO SPEND ON LOCAL SERVICE FIRMS
The energy and mineral resources ministry has issued a ministerial regulation ordering mining firms to prioritize hiring domestic service companies ...
Friday, 30 October 09
TATA POWER MAY BUY COAL FROM RIVERSDALE'S MOZAMBIQUE MINES
Bloomberg reported that, Tata Power Ltd., India’s biggest electricity generator outside state control, may buy coal from a mine in Mozambique ...
Thursday, 29 October 09
MMTC AWARDED 12.5 MILLION TONS TO THREE INDIAN TRADERS
COALspot.com (India): State-run trading firm MMTC awarded tenders for the import of 12.5 million tonnes of coal for NTPC to three Indian coal trader ...
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- Gujarat Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kaltim Prima Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Medco Energi Mining Internasional
- Planning Commission, India
- Chamber of Mines of South Africa
- MS Steel International - UAE
- South Luzon Thermal Energy Corporation
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Uttam Galva Steels Limited - India
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Iligan Light & Power Inc, Philippines
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- Kohat Cement Company Ltd. - Pakistan
- Neyveli Lignite Corporation Ltd, - India
- Interocean Group of Companies - India
- Thiess Contractors Indonesia
- Wilmar Investment Holdings
- Parliament of New Zealand
- Kobexindo Tractors - Indoneisa
- Videocon Industries ltd - India
- Star Paper Mills Limited - India
- Semirara Mining Corp, Philippines
- Formosa Plastics Group - Taiwan
- Mercator Lines Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate Of Revenue Intelligence - India
- Coal and Oil Company - UAE
- McConnell Dowell - Australia
- Grasim Industreis Ltd - India
- OPG Power Generation Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Electricity Authority, New Zealand
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Salva Resources Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- Australian Commodity Traders Exchange
- The University of Queensland
- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- Banpu Public Company Limited - Thailand
- Tata Chemicals Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Mjunction Services Limited - India
- Sree Jayajothi Cements Limited - India
- Ministry of Mines - Canada
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- Rio Tinto Coal - Australia
- Semirara Mining and Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- Aboitiz Power Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Orica Mining Services - Indonesia
- Savvy Resources Ltd - HongKong
- Larsen & Toubro Limited - India
- Economic Council, Georgia
- Bukit Baiduri Energy - Indonesia
- Parry Sugars Refinery, India
- Manunggal Multi Energi - Indonesia
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- Oldendorff Carriers - Singapore
- AsiaOL BioFuels Corp., Philippines
- LBH Netherlands Bv - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- Merrill Lynch Commodities Europe
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Lanco Infratech Ltd - India
- Bangladesh Power Developement Board
- Indika Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Makarim & Taira - Indonesia
- Gujarat Sidhee Cement - India
- Madhucon Powers Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Attock Cement Pakistan Limited
- CIMB Investment Bank - Malaysia
- European Bulk Services B.V. - Netherlands
- Maheswari Brothers Coal Limited - India
- Bayan Resources Tbk. - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- Kalimantan Lumbung Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- VISA Power Limited - India
- Bhushan Steel Limited - India
- Indogreen Group - Indonesia
- Global Green Power PLC Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- Kartika Selabumi Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Sarangani Energy Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- GMR Energy Limited - India
- Mercuria Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bhatia International Limited - India
- Dalmia Cement Bharat India
- Eastern Coal Council - USA
- PTC India Limited - India
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- International Coal Ventures Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- SMG Consultants - Indonesia
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- Australian Coal Association
- Bharathi Cement Corporation - India
- Metalloyd Limited - United Kingdom
- Straits Asia Resources Limited - Singapore
- White Energy Company Limited
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- Price Waterhouse Coopers - Russia
- Jaiprakash Power Ventures ltd
- Bulk Trading Sa - Switzerland
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- TeaM Sual Corporation - Philippines
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Indian Oil Corporation Limited
- Leighton Contractors Pty Ltd - Australia
- Central Electricity Authority - India
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- Edison Trading Spa - Italy
- Bahari Cakrawala Sebuku - Indonesia
- London Commodity Brokers - England
- Deloitte Consulting - India
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- Pipit Mutiara Jaya. PT, Indonesia
- ICICI Bank Limited - India
- Globalindo Alam Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Central Java Power - Indonesia
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- Barasentosa Lestari - Indonesia
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Bhoruka Overseas - Indonesia
- Siam City Cement PLC, Thailand
- Global Coal Blending Company Limited - Australia
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- Renaissance Capital - South Africa
- The State Trading Corporation of India Ltd
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Indonesian Coal Mining Association
- Sindya Power Generating Company Private Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Georgia Ports Authority, United States
- Bukit Asam (Persero) Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- India Bulls Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- PowerSource Philippines DevCo
- Energy Link Ltd, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Binh Thuan Hamico - Vietnam
- Marubeni Corporation - India
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- Timah Investasi Mineral - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Latin American Coal - Colombia
- Singapore Mercantile Exchange
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