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Monday, 17 December 12
SHIP PRICES TO BOTTOM OUT IN 2013 SAYS GEORGE D. GOURDOMICHALIS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 Ship values especially in older tonnage, or even modern vessels with poor quality are expected to fall further during 2013, with the market as a whole predicted to bottom-out next year, creating the ground for a rebound later on. In an exclusive interview with Hellenic Shipping News Worldwide, Mr. George D. Gourdomichalis, Managing Director of G. Bros Maritime S.A. talks about the dry bulk market's potential in 2013, which ship types appear to have the best value-for-money and debates the effectiveness of the new breed of "Eco-Carriers".
The Gourdomichalis family commenced their own shipowning activities in the London shipping market in 1950's. Since then have enjoyed a very high reputation in the shipping industry. Members of the family have kept high positions in various Boards of Directors and other Official Organizations such as being President of the Union of Greek Shipowners. In 1974 the firm's offices moved to Piraeus, Hellas while still maintaining a presence in London. Since 1990, the family's involvement in shipping has also included a joint venture with the Romanian State Company (Petromin). The Gourdomichalis brothers first independent foray into shipowning and shipmanagement activities was with the family sponsored Joint Venture with the Russian State owned Baltic Shipping Co. which operated under the flag of Baltmed Shipping Co.
In 1996, after having wound up Baltmed Shipping Co., the J.V. with Baltic Shipping Co., George and Stathis Gourdomichalis established Gourdomichalis Naftiki Eteria S.A. The establishment of the company manifested the younger generation's strong drive to succeed using its own means and skills. Since its inception in 1996 it has managed a total of six dry cargo ships including Freedom and Handy type vessels. The company has also managed a repossessed vessel on behalf of a bank.
In 2004 all their activities were consolidated into a holding company FREESEAS INC. and managed by Free Bulkers S.A. Freeseas Inc was listed on NASDAQ on December 2005. George Gourdomichalis held the position of President and Chairman and Stathis Gourdomichalis was the Treasurer and Chief Financial Officer. The two principals controlled about 48% of the listed company. In January 2007 they sold their shareholding in both Freeseas Inc. and Free Bulkers S.A. to entities controlled by the Restis group.
This development allowed George and Stathis to once again grow their "private - family" shipping activities. A new structure was put into operation under the name G Bros Maritime S.A. They employ a total of sixteen shore-based staff including a Port Captain, Engineer Superintendent, Accountants, Secretarial and Administrative Executive staff. The company occupies approximately 300 sq. meters of office space in prime area on Akti Miaouli, Piraeus, at the heart of the worlds largest shipping center.
This year's performance of the dry bulk market has been less than memorable, in fact quite the opposite. Why did this happen, especially after a satisfying 2011, at least in terms of freight rates?
The softness of the dry bulk market is clearly a function of the imbalance of tonnage supply and demand, world GDP growth slowdown experienced over the past couple of years and the lack of finance. We fail to see any satisfaction in 2011 in freight rates and values and would suggest that the dry bulk market downturn we are experiencing essentially since end 2008, with a short breather in the spring of 2010, is a prolonged down run of the market.
Do you expect 2013 to be just as challenging, or could conditions improve, as a result of an improvement of the supply/demand current imbalance, a product of heavy new building ordering of the past few years?
As stated above there are three basic reasons pressuring freight rates and values down, whereas the supply/demand balance is slowly starting to look better, there is still significant danger of continued oversupply of tonnage on the back of the very strong marketing of the supposedly “eco-ships” by yards lacking utilization. The coming year will be as challenging as 2012, but will also see the market bottom out thus creating the opportunity for purchases and positioning for a upturn.
What strategy did your company follow, in order to cope with these adverse market conditions?
We, as many others, restructured our fleet by retiring older tonnage and restructuring financial arrangements, as well as disposing of vessels with heavier than acceptable debt. In reality, we exercised a stop-loss strategy allowing us to weather the down market.
Do you thinks that ships' values are close to bottoming-out, or is there still room for lower prices?
Vessel values are a function of earnings and replacement value and as such there are certain segments and age groups that may have further down side with overage tonnage in the larger sizes being the most prominent in that group. Having said that, older tonnage across the board has further downside as it is trading at scrap related values. We also believe that younger tonnage of questionable and inferior quality has considerable down side, being that in a buyer’s market one tends to cherry pick the best of the candidates.
Which ship types do you find the most attractive in today's market?
The answer depends on the driver behind purchases, i.e. is it a speculative asset play, or an operational longer term investment? In the case of the first, we would be inclined to look at the very large modern units, whereas in the case of the latter we would look at the modern high quality/high spec handy and handy-max segment.
Do you prefer newbuilding investments, or is it better to look for modern second hand tonnage in today's market environment?
We believe that quality of design and build is paramount these days and as such would rule out any new-building activity at inferior yards. Having said that, the discount to replacement cost found in today’s market leads us to believe that very attractive valuations can be found in top quality modern second hand vessels.
How different are today's conditions in shipping finance, compared to the pre-2009 period? Is it challenging to obtain financing for new vessel acquisitions?
Immensely!! There is practically no finance available except from very select institutions to very select borrowers either by virtue of being existing clients and/or by virtue of paying down existing facilities and thus opening up credit and to the larger corporate entities who are borrowing both on the strength of their balance sheets but also on the strength of their cash flows and cash in hand. Naturally, there are certain segments that are faring better than other in obtaining finance such as the LNG and offshore industries as well as the re-appearance of quasi financial institutions providing higher cost finance. In all though, margins are up, loan to value ratios are down and security is paramount to lenders.
Do you believe that the latest trend of the so-called "Eco Carriers", i.e. ships which promise lower fuel consumption will become dominant in the future, despite the premium prices they command? Are you considering investing in such vessels in the future?
The response of any educated and experienced shipping man is that the plethora of “eco-carrier” designs are untested and make claims that have not yet been put to the test and rigors of the real sea. A properly designed, maintained and operated existing ship can provide good competition to any of the new designs and we believe it is best to reserve judgment till these designs are put to the test.
One of the major concerns of the global shipping industry has also been piracy in various areas around the world. How do you protect your vessels? Which is the best solution in your opinion?
We, as others, have been forced to employ armed guards onboard our vessels transiting/trading in high risk areas. It is not a solution to the problem but is a necessary evil. The solution lies in the geopolitical balances that need to be juggled in Somalia and/or in West Africa and/or S.E. Asia. We hope, primarily for the safety of our crews and the free flow of trade that a final solution both on shore and at sea is found the soonest possible.
Source : Nikos Roussanoglou, Hellenic Shipping News Worldwide
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Tuesday, 04 December 12
NEWCASTLE PORT SHIPPED 55.88 PERCENT MORE COAL W/E 3 DECEMBER 2012
COALspot.com - Newcastle port in Australia has loaded 2,796,341 MT of thermal and coking coal for week ended 0700 hours 3 December 2012, Newca ...
Sunday, 02 December 12
YEAR 2013, YEAR OF SUPPLY OR DEMAND?
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q1 2013 delivery gained 2.87 & 0.83 percent MoM and WoW respectively ...
Saturday, 01 December 12
TIGHT SUPPLY, DEMAND PUSH INDO-INDIA SUPRAMAX FREIGHT RATES HIGHER - VISTAAR
COALspot.com - The freight market was mixed this week as cape and Panamax indices are closing softer.
The BDI was down 0.37 pct closing at 1,086 ...
Friday, 30 November 12
FUTURE TREND OF SECOND HAND SHIP VALUES PUZZLING SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
One of the major challenges that ship owners are facing today is whether or not to invest in a second hand vessel at any given time. For instance, i ...
Friday, 30 November 12
IS INDONESIAN COAL INDUSTRY DEPENDS HEAVILY ON INDIA AND CHINA?
COALspot.com: Indonesia, the world largest multi grade coal exporter, shipped 35,143,587* tons of coal in October 2012. October exports are 19 ...
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- Sakthi Sugars Limited - India
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- Gujarat Sidhee Cement - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- Indian Energy Exchange, India
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kartika Selabumi Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement - Thailand
- Energy Development Corp, Philippines
- Africa Commodities Group - South Africa
- Jindal Steel & Power Ltd - India
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- Banpu Public Company Limited - Thailand
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- New Zealand Coal & Carbon
- Antam Resourcindo - Indonesia
- Cement Manufacturers Association - India
- Interocean Group of Companies - India
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- India Bulls Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Carbofer General Trading SA - India
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- Sojitz Corporation - Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- MS Steel International - UAE
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- Wilmar Investment Holdings
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
- Gujarat Mineral Development Corp Ltd - India
- Parry Sugars Refinery, India
- Bhushan Steel Limited - India
- Savvy Resources Ltd - HongKong
- ICICI Bank Limited - India
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- San Jose City I Power Corp, Philippines
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- Bahari Cakrawala Sebuku - Indonesia
- Deloitte Consulting - India
- Mjunction Services Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Lanco Infratech Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- McConnell Dowell - Australia
- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- Thiess Contractors Indonesia
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- Australian Commodity Traders Exchange
- White Energy Company Limited
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- Ind-Barath Power Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Baramulti Group, Indonesia
- Vedanta Resources Plc - India
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Salva Resources Pvt Ltd - India
- Minerals Council of Australia
- Siam City Cement PLC, Thailand
- Maharashtra Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Binh Thuan Hamico - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Makarim & Taira - Indonesia
- Eastern Energy - Thailand
- Barasentosa Lestari - Indonesia
- Coal and Oil Company - UAE
- Semirara Mining and Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Kaltim Prima Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- Iligan Light & Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- Singapore Mercantile Exchange
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Merrill Lynch Commodities Europe
- Jaiprakash Power Ventures ltd
- Petron Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Dalmia Cement Bharat India
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Eastern Coal Council - USA
- SMG Consultants - Indonesia
- Xindia Steels Limited - India
- Mercuria Energy - Indonesia
- Planning Commission, India
- GMR Energy Limited - India
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- PTC India Limited - India
- OPG Power Generation Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- Edison Trading Spa - Italy
- CIMB Investment Bank - Malaysia
- Larsen & Toubro Limited - India
- Leighton Contractors Pty Ltd - Australia
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- Marubeni Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Bhoruka Overseas - Indonesia
- Holcim Trading Pte Ltd - Singapore
- GVK Power & Infra Limited - India
- Parliament of New Zealand
- Economic Council, Georgia
- VISA Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Electricity Authority - India
- Kepco SPC Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Indika Energy - Indonesia
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Sical Logistics Limited - India
- Krishnapatnam Port Company Ltd. - India
- Videocon Industries ltd - India
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- Bhatia International Limited - India
- Posco Energy - South Korea
- Toyota Tsusho Corporation, Japan
- Australian Coal Association
- Orica Australia Pty. Ltd.
- Global Business Power Corporation, Philippines
- Mercator Lines Limited - India
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Chamber of Mines of South Africa
- SN Aboitiz Power Inc, Philippines
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Aboitiz Power Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- Indian Oil Corporation Limited
- Attock Cement Pakistan Limited
- Tata Chemicals Ltd - India
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- Standard Chartered Bank - UAE
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