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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, 09 October 12
REALM RESOURCES RECOMMENCES DRILLING AT KATINGAN RIA COAL PROJECT
COALspot.com : Realm Resources Ltd. (ASX) has announced that it has commenced work on the phase three technical programme at its Katingan Project in ...
Sunday, 07 October 12
INDONESIAN GOVERNMENT DECLARED HBA FELL AGAIN IN OCTOBER
COALspot.com - The Indonesian government’s declared coal reference price has lost US$ 0.17 per MT M-M.
The monthly coal referen ...
Saturday, 06 October 12
CFR SOUTH CHINA COAL SWAPS FOR DECEMBER'13 DELIVERY GAINED 1.3 PERCENT W-W
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for December 2012 delivery gained 0.098 percent and 0.164 percent W-W and D-D respectively o ...
Saturday, 06 October 12
FREIGHT MARKET IS LIKELY TO PICK AFTER THE HOLIDAYS IN CHINA - VISTAAR
COALspot.com - The freight market appeared to be seeing some increase BDI up by 14.23 pct closing at 875 points. The Cape and Panamax index also saw ...
Thursday, 04 October 12
CAPESIZE : IN SPITE OF THE HOLIDAYS IN CHINA, RATES ARE CLIMBING UP - FEARNLEYS AS
Handy
Atlantic market remains quiet due to lack of cargoes and more supply of ships. Rates from Continent to east Med were around USD 13k and Black ...
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- Wood Mackenzie - Singapore
- Antam Resourcindo - Indonesia
- Orica Australia Pty. Ltd.
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- Sinarmas Energy and Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Dalmia Cement Bharat India
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- Uttam Galva Steels Limited - India
- PowerSource Philippines DevCo
- GVK Power & Infra Limited - India
- Anglo American - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Malabar Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- Vedanta Resources Plc - India
- Vijayanagar Sugar Pvt Ltd - India
- SMG Consultants - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Makmur.PT - Indonesia
- Petron Corporation, Philippines
- CNBM International Corporation - China
- Leighton Contractors Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- Commonwealth Bank - Australia
- Tata Chemicals Ltd - India
- Sakthi Sugars Limited - India
- London Commodity Brokers - England
- Semirara Mining and Power Corporation, Philippines
- Parry Sugars Refinery, India
- LBH Netherlands Bv - Netherlands
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Parliament of New Zealand
- Trasteel International SA, Italy
- Central Electricity Authority - India
- Medco Energi Mining Internasional
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Salva Resources Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- Altura Mining Limited, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- MS Steel International - UAE
- European Bulk Services B.V. - Netherlands
- Posco Energy - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Edison Trading Spa - Italy
- Kaltim Prima Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Videocon Industries ltd - India
- Sree Jayajothi Cements Limited - India
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Kalimantan Lumbung Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Coal and Oil Company - UAE
- Goldman Sachs - Singapore
- Merrill Lynch Commodities Europe
- Lanco Infratech Ltd - India
- Minerals Council of Australia
- Economic Council, Georgia
- Metalloyd Limited - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Coalindo Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Deloitte Consulting - India
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Singapore Mercantile Exchange
- Borneo Indobara - Indonesia
- Star Paper Mills Limited - India
- Grasim Industreis Ltd - India
- Kepco SPC Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- Madhucon Powers Ltd - India
- Maheswari Brothers Coal Limited - India
- Orica Mining Services - Indonesia
- Eastern Coal Council - USA
- Africa Commodities Group - South Africa
- Sindya Power Generating Company Private Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement - Thailand
- Thiess Contractors Indonesia
- Bangladesh Power Developement Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- GN Power Mariveles Coal Plant, Philippines
- Electricity Generating Authority of Thailand
- VISA Power Limited - India
- Independent Power Producers Association of India
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- Energy Link Ltd, New Zealand
- Manunggal Multi Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- White Energy Company Limited
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- Indika Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Carbofer General Trading SA - India
- The State Trading Corporation of India Ltd
- Renaissance Capital - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Mercator Lines Limited - India
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- Central Java Power - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Globalindo Alam Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- Interocean Group of Companies - India
- Indonesian Coal Mining Association
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Kobexindo Tractors - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cigading International Bulk Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- PTC India Limited - India
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Sical Logistics Limited - India
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
- Vizag Seaport Private Limited - India
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Aditya Birla Group - India
- Electricity Authority, New Zealand
- Latin American Coal - Colombia
- Timah Investasi Mineral - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Neyveli Lignite Corporation Ltd, - India
- Bulk Trading Sa - Switzerland
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- Chamber of Mines of South Africa
- SN Aboitiz Power Inc, Philippines
- Marubeni Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Transport, Egypt
- Riau Bara Harum - Indonesia
- Semirara Mining Corp, Philippines
- Iligan Light & Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- Jaiprakash Power Ventures ltd
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- McConnell Dowell - Australia
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- Sojitz Corporation - Japan
- International Coal Ventures Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Georgia Ports Authority, United States
- Australian Coal Association
- Attock Cement Pakistan Limited
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
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