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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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Monday, 10 September 12
DRY BULK MARKET SLOWLY BUT SURELY REACHING CRITICAL STATUS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The radical consequences of the shifts in dry bulk demand and prices, especially for the most sought after commodity, concerning the industry, i.e. ...
Monday, 10 September 12
ORPHEUS ENERGY SECURES INDONESIAN COAL TRADING LICENSE
COALspot.com - Indonesian coal producer, Orpheus Energy (ASX:OEG) has announced today that the Indonesian Ministry of Energy and Mineral Resources h ...
Monday, 10 September 12
A SNAPSHOT ON THE ECONOMIC AND SHIPPING ENVIRONMENT - GOLDEN DESTINY / HELLENIC SHIPPING
The European Central Bank left its interest rate unchanged at 0.75% focusing on pushing down borrowing costs in troubled economies, Spain and Italy. ...
Sunday, 09 September 12
H213 SUB-BIT FOB INDONESIA COAL SWAPS ARE TRADING HIGHER
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for October 2012 delivery lost 0.14 percent W-O-W on 7 September 2012, Friday closing but gained ...
Saturday, 08 September 12
INDO INDIA ROUTE FREIGHT FOR SUPRAMAX REMAINS STRONG - CAPT. REDDY
COALspot.com - The freight market overall remained weak and except for cape index all other sectors were down. The biggest drop was in the Panamax s ...
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- South Luzon Thermal Energy Corporation
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- Altura Mining Limited, Indonesia
- PowerSource Philippines DevCo
- Energy Development Corp, Philippines
- Minerals Council of Australia
- Larsen & Toubro Limited - India
- Attock Cement Pakistan Limited
- White Energy Company Limited
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- Independent Power Producers Association of India
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- Georgia Ports Authority, United States
- Makarim & Taira - Indonesia
- Xindia Steels Limited - India
- Tamil Nadu electricity Board
- CNBM International Corporation - China
- Australian Coal Association
- Semirara Mining and Power Corporation, Philippines
- Coal and Oil Company - UAE
- Madhucon Powers Ltd - India
- ASAPP Information Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bulk Trading Sa - Switzerland
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Global Business Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- OPG Power Generation Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Coal Council - USA
- Thai Mozambique Logistica
- PTC India Limited - India
- ICICI Bank Limited - India
- Meralco Power Generation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Deloitte Consulting - India
- Planning Commission, India
- Siam City Cement - Thailand
- Indian Energy Exchange, India
- India Bulls Power Limited - India
- Bhushan Steel Limited - India
- Power Finance Corporation Ltd., India
- Antam Resourcindo - Indonesia
- Ministry of Transport, Egypt
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- Wood Mackenzie - Singapore
- Manunggal Multi Energi - Indonesia
- Coalindo Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Bukit Baiduri Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Globalindo Alam Lestari - Indonesia
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- Goldman Sachs - Singapore
- Cement Manufacturers Association - India
- Orica Mining Services - Indonesia
- Romanian Commodities Exchange
- Alfred C Toepfer International GmbH - Germany
- Videocon Industries ltd - India
- Kapuas Tunggal Persada - Indonesia
- Sarangani Energy Corporation, Philippines
- Chamber of Mines of South Africa
- Global Green Power PLC Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Mintek Dendrill Indonesia
- Indogreen Group - Indonesia
- Indika Energy - Indonesia
- McConnell Dowell - Australia
- Semirara Mining Corp, Philippines
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- Riau Bara Harum - Indonesia
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Binh Thuan Hamico - Vietnam
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Directorate General of MIneral and Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Singapore Mercantile Exchange
- Bhatia International Limited - India
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- Holcim Trading Pte Ltd - Singapore
- Lanco Infratech Ltd - India
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- Timah Investasi Mineral - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- Central Electricity Authority - India
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- MS Steel International - UAE
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- Sojitz Corporation - Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Cigading International Bulk Terminal - Indonesia
- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- The Treasury - Australian Government
- Central Java Power - Indonesia
- VISA Power Limited - India
- Electricity Authority, New Zealand
- Toyota Tsusho Corporation, Japan
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- Medco Energi Mining Internasional
- Malabar Cements Ltd - India
- The University of Queensland
- Oldendorff Carriers - Singapore
- Jaiprakash Power Ventures ltd
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- Anglo American - United Kingdom
- Formosa Plastics Group - Taiwan
- Trasteel International SA, Italy
- Mjunction Services Limited - India
- Ministry of Mines - Canada
- Carbofer General Trading SA - India
- New Zealand Coal & Carbon
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- Interocean Group of Companies - India
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- Economic Council, Georgia
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Samtan Co., Ltd - South Korea
- Vedanta Resources Plc - India
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Ambuja Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Barasentosa Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Edison Trading Spa - Italy
- Maharashtra Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Mercator Lines Limited - India
- Uttam Galva Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Krishnapatnam Port Company Ltd. - India
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- Billiton Holdings Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Sical Logistics Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Marubeni Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- Ind-Barath Power Infra Limited - India
- Bhoruka Overseas - Indonesia
- Sinarmas Energy and Mining - Indonesia
- GMR Energy Limited - India
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