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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, 29 October 09
COAL OF AFRICA SEES VELE OUTPUT BY APRIL 2010
* First coal from Mooiplaats mined and sold
* Talks with Transnet on rail PPP on track
Reuters reported that, Coal of Africa (CoAL) said on Mond ...
Thursday, 29 October 09
UAE FUND EYES INDIA POWER FOR INDONESIAN COAL
Reuters reported that, the UAE's Middle East Coal (MEC) is in talks to buy equity stakes in India's power plants in exchange for long-term coal su ...
Thursday, 29 October 09
CESC POSTS RS 126 CRORE (US$ 26,655,178) NET PROFIT IN QUARTER TWO
Economic Times reported that, Energy major CESC posted a marginal increase in net profit at Rs 126 crore (US$ 26,655,178) for the quarter ended Sep ...
Thursday, 29 October 09
INDIA MMTC TENDER SET TO BOOST S.AFRICA COAL
The South African coal market is set to be boosted further by India's state-owned trading firm MMTC Ltd's tender for 12.5 million tonnes, Indian t ...
Thursday, 29 October 09
INDIA CEMENTS SET TO ACQUIRE COAL MINE IN INDONESIA
Business-Standard reported that, India Cements is set to acquire a coal mine in Indonesia for around $20 million (around Rs 100 crore). The company ...
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- Carbofer General Trading SA - India
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Africa Commodities Group - South Africa
- The Treasury - Australian Government
- Kepco SPC Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Malabar Cements Ltd - India
- ASAPP Information Group - India
- Aditya Birla Group - India
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- CNBM International Corporation - China
- VISA Power Limited - India
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
- India Bulls Power Limited - India
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- South Luzon Thermal Energy Corporation
- Meralco Power Generation, Philippines
- Salva Resources Pvt Ltd - India
- PTC India Limited - India
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Orica Australia Pty. Ltd.
- PNOC Exploration Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Global Business Power Corporation, Philippines
- Parliament of New Zealand
- Heidelberg Cement - Germany
- Bhushan Steel Limited - India
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- New Zealand Coal & Carbon
- Coastal Gujarat Power Limited - India
- Petron Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Vizag Seaport Private Limited - India
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Eastern Energy - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Power Finance Corporation Ltd., India
- Borneo Indobara - Indonesia
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- GMR Energy Limited - India
- Bangladesh Power Developement Board
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- Kaltim Prima Coal - Indonesia
- Madhucon Powers Ltd - India
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Mining Services - Indonesia
- Energy Link Ltd, New Zealand
- Electricity Authority, New Zealand
- Formosa Plastics Group - Taiwan
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Coal Association
- Star Paper Mills Limited - India
- LBH Netherlands Bv - Netherlands
- Indian Energy Exchange, India
- Ind-Barath Power Infra Limited - India
- Planning Commission, India
- McConnell Dowell - Australia
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Merrill Lynch Commodities Europe
- San Jose City I Power Corp, Philippines
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Sree Jayajothi Cements Limited - India
- Larsen & Toubro Limited - India
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- Marubeni Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Interocean Group of Companies - India
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Mines - Canada
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- Coalindo Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement PLC, Thailand
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- ICICI Bank Limited - India
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- Kartika Selabumi Mining - Indonesia
- Latin American Coal - Colombia
- Ministry of Transport, Egypt
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Krishnapatnam Port Company Ltd. - India
- The University of Queensland
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- Sindya Power Generating Company Private Ltd
- Leighton Contractors Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- TNB Fuel Sdn Bhd - Malaysia
- Independent Power Producers Association of India
- Mercuria Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Wilmar Investment Holdings
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- Commonwealth Bank - Australia
- Thiess Contractors Indonesia
- Grasim Industreis Ltd - India
- Renaissance Capital - South Africa
- Goldman Sachs - Singapore
- Singapore Mercantile Exchange
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Ambuja Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Essar Steel Hazira Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Minerals Council of Australia
- Baramulti Group, Indonesia
- Simpson Spence & Young - Indonesia
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- Global Coal Blending Company Limited - Australia
- Deloitte Consulting - India
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- White Energy Company Limited
- Siam City Cement - Thailand
- Indian Oil Corporation Limited
- Kumho Petrochemical, South Korea
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- Neyveli Lignite Corporation Ltd, - India
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Binh Thuan Hamico - Vietnam
- Parry Sugars Refinery, India
- GAC Shipping (India) Pvt Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- Agrawal Coal Company - India
- Jaiprakash Power Ventures ltd
- Trasteel International SA, Italy
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- London Commodity Brokers - England
- Meenaskhi Energy Private Limited - India
- Vedanta Resources Plc - India
- Posco Energy - South Korea
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