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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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Tuesday, 20 October 09
COAL PRICES TO SURGE IN 2010 DESPITE AMPLE SUPPLY
Commodity Online reported that, Coal prices are indeed destined to go higher as they follow the rise of ‘coal currencies’ such as Austra ...
Tuesday, 20 October 09
INDIA MAY CUT STAKE IN NTPC BY DECEMBER, POWER SECRETARY SAYS
Bloomberg reported that, India’s government may sell a 5 percent stake in NTPC Ltd., the country’s biggest power producer, as early as D ...
Monday, 19 October 09
COAL PRICE UP AGAIN - RICHARDS BAY TERMINAL
Export prices rose 45 cents, or 0.7%, to an average of 64.05 a metric ton in the week ended Oct. 16, according to McCloskey Group.
The week was & ...
Monday, 19 October 09
COAL MINISTRY SEEKS EXPLANATION FROM AP GENCO
The Hindu Business reported that, the Coal Ministry has asked the Power Generation Corporation of Andhra Pradesh (AP Genco) to explain why there was ...
Monday, 19 October 09
CEMENT UNLIKELY TO COST MORE DESPITE COAL PRICE HIKE
Business-Standard reported that, Cement manufacturers will not immediately hike prices of the construction material, despite a surge in their input ...
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- GVK Power & Infra Limited - India
- Ministry of Finance - Indonesia
- PNOC Exploration Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Kartika Selabumi Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Siam City Cement - Thailand
- Global Coal Blending Company Limited - Australia
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Orica Mining Services - Indonesia
- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- Grasim Industreis Ltd - India
- Ind-Barath Power Infra Limited - India
- Planning Commission, India
- San Jose City I Power Corp, Philippines
- Essar Steel Hazira Ltd - India
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
- Ambuja Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Binh Thuan Hamico - Vietnam
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Wood Mackenzie - Singapore
- Port Waratah Coal Services - Australia
- Trasteel International SA, Italy
- Ministry of Transport, Egypt
- Madhucon Powers Ltd - India
- IEA Clean Coal Centre - UK
- International Coal Ventures Pvt Ltd - India
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Romanian Commodities Exchange
- MS Steel International - UAE
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Coastal Gujarat Power Limited - India
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Australian Commodity Traders Exchange
- Central Java Power - Indonesia
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Mercuria Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- Kaltim Prima Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Gujarat Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- The University of Queensland
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- Renaissance Capital - South Africa
- Simpson Spence & Young - Indonesia
- Savvy Resources Ltd - HongKong
- Orica Australia Pty. Ltd.
- Wilmar Investment Holdings
- Riau Bara Harum - Indonesia
- Global Business Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- London Commodity Brokers - England
- Bharathi Cement Corporation - India
- New Zealand Coal & Carbon
- Dalmia Cement Bharat India
- ASAPP Information Group - India
- Makarim & Taira - Indonesia
- Miang Besar Coal Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- SN Aboitiz Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Power Finance Corporation Ltd., India
- Eastern Coal Council - USA
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- TeaM Sual Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Minerals Council of Australia
- Indonesian Coal Mining Association
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- India Bulls Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Manunggal Multi Energi - Indonesia
- The Treasury - Australian Government
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- Sakthi Sugars Limited - India
- Bulk Trading Sa - Switzerland
- Gujarat Mineral Development Corp Ltd - India
- Medco Energi Mining Internasional
- Goldman Sachs - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GMR Energy Limited - India
- Vedanta Resources Plc - India
- Mercator Lines Limited - India
- Intertek Mineral Services - Indonesia
- Independent Power Producers Association of India
- Electricity Authority, New Zealand
- Sojitz Corporation - Japan
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Oldendorff Carriers - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Baramulti Group, Indonesia
- Latin American Coal - Colombia
- Economic Council, Georgia
- Heidelberg Cement - Germany
- Malabar Cements Ltd - India
- Australian Coal Association
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Sindya Power Generating Company Private Ltd
- Gujarat Sidhee Cement - India
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- ICICI Bank Limited - India
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- Tamil Nadu electricity Board
- CIMB Investment Bank - Malaysia
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- GAC Shipping (India) Pvt Ltd
- Videocon Industries ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Indogreen Group - Indonesia
- Georgia Ports Authority, United States
- Billiton Holdings Pty Ltd - Australia
- Parliament of New Zealand
- Jaiprakash Power Ventures ltd
- Bukit Baiduri Energy - Indonesia
- Africa Commodities Group - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- Posco Energy - South Korea
- Mintek Dendrill Indonesia
- Energy Link Ltd, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Standard Chartered Bank - UAE
- Eastern Energy - Thailand
- Timah Investasi Mineral - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Attock Cement Pakistan Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maheswari Brothers Coal Limited - India
- Meenaskhi Energy Private Limited - India
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- Energy Development Corp, Philippines
- Agrawal Coal Company - India
- Coal and Oil Company - UAE
- GN Power Mariveles Coal Plant, Philippines
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- IHS Mccloskey Coal Group - USA
- Petron Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chamber of Mines of South Africa
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Interocean Group of Companies - India
- Ministry of Mines - Canada
- VISA Power Limited - India
- Toyota Tsusho Corporation, Japan
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- Rashtriya Ispat Nigam Limited - India
- Straits Asia Resources Limited - Singapore
- Siam City Cement PLC, Thailand
- Anglo American - United Kingdom
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