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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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Friday, 23 October 09
AUSTRALIA APPROVES CHINESE TAKEOVER OF FELIX RESOURCES
* Australia give conditional approval to China's Felix deal
* Chinese owner must list the assets on Australian exchange
Reuters reported that, ...
Friday, 23 October 09
IVANHOE TARGETING 20 MILLION TONS OF COAL OUTPUT IN MONGOLIA
Bloomberg reported that, Ivanhoe Mines Ltd., developing a $4 billion copper and gold mine in Mongolia with Rio Tinto Group, is targeting long-term c ...
Friday, 23 October 09
XSTRATA PLANS $1BN AUSTRALIAN COAL PORT
Xstrata Plc, the world's biggest exporter of steam coal, plans to build a new $1 billion coal port in Australia, it said.
The proposed Balaclava ...
Friday, 23 October 09
MEXICO'S CFE SEEKS 6.24 MLN T COAL FOR 2010-12
Reuters reported that, Mexico's state-owned power monopoly plans to award a tender for 6.24 million tonnes of steam coal in December, according to ...
Friday, 23 October 09
CIL PRICE HIKE LIKELY TO PUSH POWER RATES UP
Business-Standard reported that, May squeeze cement companies’ margins, but the steel sector is unlikely to be affected much.
The upward re ...
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- Sinarmas Energy and Mining - Indonesia
- Bhatia International Limited - India
- Jaiprakash Power Ventures ltd
- Kalimantan Lumbung Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Formosa Plastics Group - Taiwan
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- CNBM International Corporation - China
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- Straits Asia Resources Limited - Singapore
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- Agrawal Coal Company - India
- Larsen & Toubro Limited - India
- Rio Tinto Coal - Australia
- Bukit Baiduri Energy - Indonesia
- Parliament of New Zealand
- CIMB Investment Bank - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Manunggal Multi Energi - Indonesia
- The State Trading Corporation of India Ltd
- Borneo Indobara - Indonesia
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- Ind-Barath Power Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- ICICI Bank Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Global Coal Blending Company Limited - Australia
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- Karaikal Port Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Meenaskhi Energy Private Limited - India
- Dalmia Cement Bharat India
- Electricity Authority, New Zealand
- Australian Coal Association
- Indian Oil Corporation Limited
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Ministry of Finance - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Carbofer General Trading SA - India
- Thai Mozambique Logistica
- Simpson Spence & Young - Indonesia
- Mjunction Services Limited - India
- Alfred C Toepfer International GmbH - Germany
- Cigading International Bulk Terminal - Indonesia
- Deloitte Consulting - India
- Kapuas Tunggal Persada - Indonesia
- Commonwealth Bank - Australia
- Orica Australia Pty. Ltd.
- Salva Resources Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Star Paper Mills Limited - India
- Cement Manufacturers Association - India
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- Malabar Cements Ltd - India
- Sakthi Sugars Limited - India
- Bhoruka Overseas - Indonesia
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- Indika Energy - Indonesia
- Mercuria Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Antam Resourcindo - Indonesia
- South Luzon Thermal Energy Corporation
- Krishnapatnam Port Company Ltd. - India
- PowerSource Philippines DevCo
- Global Business Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Mercator Lines Limited - India
- Sojitz Corporation - Japan
- Port Waratah Coal Services - Australia
- Baramulti Group, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Wood Mackenzie - Singapore
- Chettinad Cement Corporation Ltd - India
- SMC Global Power, Philippines
- LBH Netherlands Bv - Netherlands
- The Treasury - Australian Government
- Vizag Seaport Private Limited - India
- Oldendorff Carriers - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Marubeni Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Wilmar Investment Holdings
- Gujarat Electricity Regulatory Commission - India
- Intertek Mineral Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sree Jayajothi Cements Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Standard Chartered Bank - UAE
- IEA Clean Coal Centre - UK
- Globalindo Alam Lestari - Indonesia
- ASAPP Information Group - India
- Merrill Lynch Commodities Europe
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Eastern Energy - Thailand
- Gujarat Sidhee Cement - India
- Minerals Council of Australia
- GAC Shipping (India) Pvt Ltd
- Billiton Holdings Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- Makarim & Taira - Indonesia
- Siam City Cement - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Uttam Galva Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Bhushan Steel Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Metalloyd Limited - United Kingdom
- Latin American Coal - Colombia
- GVK Power & Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- Semirara Mining Corp, Philippines
- Barasentosa Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- Savvy Resources Ltd - HongKong
- PNOC Exploration Corporation - Philippines
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- Samtan Co., Ltd - South Korea
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
- Videocon Industries ltd - India
- Price Waterhouse Coopers - Russia
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- Australian Commodity Traders Exchange
- Essar Steel Hazira Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- Coalindo Energy - Indonesia
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- Sarangani Energy Corporation, Philippines
- SMG Consultants - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Renaissance Capital - South Africa
- Planning Commission, India
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- Attock Cement Pakistan Limited
- Xindia Steels Limited - India
- Energy Link Ltd, New Zealand
- Medco Energi Mining Internasional
- Edison Trading Spa - Italy
- Leighton Contractors Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Parry Sugars Refinery, India
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- Kepco SPC Power Corporation, Philippines
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- VISA Power Limited - India
- Aditya Birla Group - India
- GN Power Mariveles Coal Plant, Philippines
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bangladesh Power Developement Board
- Tamil Nadu electricity Board
- Ministry of Mines - Canada
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