Greek Shipping News Cuts
Week 22 - 2011


Greek boost for Korean builders

STX Offshore & Shipbuilding of South Korea entered the shuttle tanker market on 18 April by winning two 155,000dwt shuttle tanker orders from European Navigation at a value of $100M apiece. They will be delivered by April 2013.
The vessels have been ordered to service a long-term charter contract for Petrobras of Brazil. European Navigation holds options for a further two vessels of this class, exercisable during 1Q/2012.
This is the second container vessel new order for the Korean shipbuilder, which entered the box ship market by winning four 3,600teu vessels from Metrostar in Greece late last year.
Source: Fairplay, Solutions and Newbuildings - Magazine - News 02 Jun 2011

Veniamis: Outlook and prospects for shipping remain uncertain
---Union of Greek Shipowners (UGS) president Theodore Veniamis has warned the outlook and prospects for shipping remain uncertain mainly because of many unpredictable factors including the Japanese disaster of March and the financial cost of piracy.
Though in 2010 the shipping industry faced the fall-out of the global financial crisis, "Greek shipping demonstrated considerable resilience and managed to maintain its international leadership without suspending, albeit at a different pace, its extensive fleet renewal programme" writes Veniamis in his prologue to the UGS's annual report for 2010 / 2011.
"It is evident the freight market euphoria of the previous two years was a support for the ensuing difficult period although not all margins for further ambitious growth plans were sustained," says the UGS president He warns sliding freight rates are not the only obstacles looming in the horizon, as "new measures being introduced burdened maritime transport". He says there are "serious impediments to the prospects of the Greek shipping industry, which has already paid and will possibly continue to pay a heavy toll". These include "the escalation of piracy attacks and the disaster in Japan" namely the "tsunami and the uncontrollable nuclear threat from the accident in the Fukushima nuclear power plant".
Veniamis writes: "These two looming risks to the safety of international maritime transportation are unpredictable as to how and when they could be eliminated as well as to the extent of the devastation they might leave behind. Piracy, in particular, with its inexplicable resilience, incurs extraordinary financial losses [with an overall estimated cost between $7bn - $12bn] and endangers the lives of seafarers."
"Confusion caused by the disaster in Japan leaves no room for assessment of its consequences on the dynamic Far Eastern market as well as on Greek interests, exposed in that severely tested country. In my view, these are reasons demanding a careful evaluation of the difficulties faced by Greek shipping during the last 12 months, still ongoing difficulties that may take unpredictable dimensions."
He notes the continuing debate on issues pertaining to vessels and seafarers at international or European level, has achieved little progress, presumably because "political leaders around the world are absorbed in tackling the persistent economic crisis".
In Greece, the significant issue of "the unjustifiable abolition of the ministry of Merchant Marine remains unresolved". "The channelling of the Hellenic Coast Guard to other competences hinder the daily operation of shipping companies while, at the same time, weakens the Greek presence in international organisations," he writes. "The dynamism and prestige of this presence was due to the significant contribution of the experienced officers of the Coast Guard."
"This is a policy with purely national characteristics, especially since shipping is the only sector unaffected by the domestic crisis and which, in the future, will be able to sustain the difficult process towards growth," contends the UGS president.

--- Friday 03 June 2011, 17:42 by Nigel Lowry
As the economy worsens, the shipping industry says it needs more state backing
BACK in 2002, just two years before the Athens Olympic Games, the flow of direct foreign investment into Greece was a paltry $50m, barely more than the amount of a single Greek suezmax tanker investment.
By the start of the 1990s the debt had reached 140% of GDP, although the country was still being buoyed by significant EU support funds and those were different times.
This was equivalent to 6.7% of GDP, although calculated on a net basis the proportion is somewhat less than this. It also covered about 35% of the national trade deficit.

Greek Shipping and the Economy
--- After a two year period of slackening demand due to world recession, in 2010 the world economy showed signs of a return to positive indicators, mainly due to the rapid growth of China, India and Brazil but also fuelled by a better than expected performance of the US economy. In 2010, the world shipping market registered a modest but fragile recovery from the crisis of the previous years. Volatility, still persisting in the market, makes predictions hard. The flooding of the market with unprecedented overcapacity raises questions about the sustainability of the recovery. Overcapacity will be the key problem in 2011. In any case, the overall recovery of the shipping market will depend on the many looming imponderables of the world economy including the duration of the geopolitical tensions in North Africa / Middle East and their repercussions on freight rates.
In 2010, the economic data of the Greek flag fleet were to a large extent satisfactory. The Greek register accounted for 2,096 vessels (over 100 gt) amounting to 43,086,974 gt1. The Greek owned tonnage held the first position internationally. The fleet amounted to 3,185 vessels (ships greater than 1,000 gt) of 202.19 million deadweight tons, representing 14.33 % of total world dwt2. The Greek flag fleet ranks fifth internationally and first in the EU (in terms of dwt). The Greek owned fleet under EU flags accounts for 41.49% of the EU dw tonnage. Greek owners control 22.54% of the world tanker fleet (crude/oil product tankers) and 16.80% of the world bulk carrier fleet in terms of dwt (excluding ships currently on order). This record is all the more noteworthy in a precarious year for world shipping, since world trade shrank by 4.50%, reaching a level lower than in 2007. The combination of reduced demand in cargoes amounting to 350 m tonnes and overcapacity of newbuildings kept freight rates at low levels in particular in the last months of 2010 / beginning 2011.
By the end of December 2010, newbuilding orders by Greek interests amounted to 490 vessels (over 1,000 gt), representing 49.15 million dwt. Out of these vessels, 128 were tankers corresponding to 20.05% of world tonnage (dwt), i.e., 96 crude/oil product tankers amounting 22.64% of world tonnage (dwt), 25 chemical/product tankers amounting to 13% of world tonnage (dwt), 7 product tankers amounting to 7.5% of world tonnage (dwt) and 296 bulkers corresponding to 12.10% of world tonnage (dwt) on order in each category. The overall capital invested in new building orders by Greek shipping, mainly in Far Eastern shipyards, amounted to over 10% of their entire order book. These orders place Greeks in the first position internationally with 8.70% of the world fleet by units and 13.5% by capacity. Lastly, in 2010, Greece headed the list of demolition sellers scrapping 158 vessels equivalent to 12.6% of worldwide scrapping.
Source: Union of Greek Shipowners, UGS Annual Report 2010-2011.pdf,

Union of Greek Shipowners, UGS Annual Report 2010-2011
To view the UGS Annual Report 2010-2011, please go to

Tsirigakis launches new investment vehicle
---Nautilus Marine Acquisition Corp, a new blank-cheque company, has just been launched with the aim of raising an initial $60m.
Prokopios (Akis) Tsirigakis, former chief executive of Nasdaq-listed Star Bulk Carriers, and George Syllantavos, who will resign as a director and chief financial officer of Star Bulk on 31 August, will serve as co-chiefs of the new special purpose acquisition company (spac).
Tsirigakis will also hold the titles of chairman of the board and president, while Syllantavos will also serve as chief financial officer, secretary, treasurer and director.
Nautilus will have up to 19 months to consummate its initial business transaction, which sources suggest may not necessarily be simple ship purchases but could be investment in any shipping company or assets, or activities such as brokerage, services or shipmanagement.
It could explore a reverse merger with companies that are eyeing the public markets but are unable to do so on their own.
The founders of the new vehicle are understood to believe that the timing of their launch is ideal as many players deduce that in the next six months asset prices in the dry market will hit rock bottom, while tanker prices may rise slightly but will remain low.
Nautilus will issue six million units at a purchase price of $10 each, consisting of one share of common stock and one warrant.
In addition, Nicolas Bornozis of investor relations and advisory firm Capital Link, Alexandros Argyros of Axia Ventures Group and Stylianos (Stelios) Anastopoulos, honorary consul of the Commonwealth of the Bahamas in Greece, and a retired rear admiral, will serve as directors of Nautilus.
By Gillian Whittaker Athens
Published: 22:01 GMT, 02 Jun 11 | updated: 07:41 GMT, 02 Jun 11

---With particular success, the Conference of the Institute of Chartered Shipbrokers Greek Branch took place on Wednesday, 1st of June 2011, with the theme "Orderbook havoc in a marginal market. Scrap or trade?'', which took place at the Yacht Club Greece. Many well-established shipping professionals attended the conference, covering all sides of the industry.
The speakers of the conference were Mr. Nicolas A. Tsavliris Chairman of the Tsavliris Salvage Group and of the ICS Greek Branch; Mr. Michael Bodouroglou, Chairman and CEO at Paragon Shipping Inc.; Mr. Philip Bush, Manager at Global Marketing Systems Inc.; Mr. George Xyradakis, Managing Director of XRTC Ltd; Mr. Georgi Slavov, Head of Dry Freight & Basic Recourses Research, ICAP Shipping Ltd. Mr. Simon Ward, Divisional Director at HSBC Shipping Services Ltd. Each one of the speakers provided his insight and views on the topic and on what are the presumptions for the future condition in the shipping market.
Mrs. Natalia Margioli Komninou, Managing Director of the ICS Greek Branch and HMC, opened the conference and stated that "the current conditions in the shipping market have been influenced by the previous peak in the shipping and by the recent events that took place in Japan, Libya and the Middle East. The current orderbook and the low freight rates, emerge new dilemma among the shipping circles: Continue trading, laying up or scrapping?"
A welcome to the audience was made by Mr. George Gratsos, President of the Hellenic Chamber of Shipping, who congratulated the ICS Greek Branch for its successful contribution of high standard education to the Greek shipping community.
With reference to the traditional Greek shipowners and their trend to keep their fleet by the end of its working life, Mr. Nicolas Tsavliris mentioned the "From Shipyards to scrapyards" story.
Mr. Tsavliris, stated that, despite the decision of a shipping company to scrap, trade or lay up, the market cannot restore its balance, as the overall supply of the existing tonnage exceeds the total tonne /mile demand.
According to his point of view, a more intensive rate of scrapping in combination with restraint in ordering new ships, could lead to a fleet shrinkage and therefore, better market conditions.
Finally, Mr. Tsavliris concluded that "the right timing to adopt this policy is now, while demolition prices are still high."
Mr. Slavov, referring to the market conditions, remarked that tonnage supply growth remains well above the growth of seaborne trade. He estimated that the balance will not be restored until late 2012 and early 2013.
As a result, the above mentioned estimation keeps the fleet utilization depressed, namely, below 90 per cent. This situation implies that rates will remain at very low levels.
Mr. Slavov concluded that the biggest danger at this time is the spare yard capacity which will be available after 2012... This capacity can be filled at a relatively short notice and therefore potentially create the next investment bubble.
Mr. Philip Bush started his presentation by mentioning that at the end of the life of a vessel, it has to be recycled. There is no second option. Referring to the five major recycling markets, India, China, Bangladesh, Pakistan and Turkey, will be required to recycle such redundant vessels. The recycling of vessels in these countries is efficient as they reuse the maximum amounts of the material. Concerning the enery efficiency of the rerolling of the ships' plates, he viewed that there is a significant advantage to the production of rebars.
Mr. Bush advised that standards in the yards have been partially improved, but he believes that more advances are needed to be made. Also, he did not omit to mention the need to enforce the universal adoption of the Hong Kong Convention, while he stated that Basel Convention should be abolished.
In conclusion, the director of GMS estimated that the industry is obliged to grow over the forthcoming years.
Mr. Michael Bodouroglou, recognized that in a bad market, shipowners have to consider the operational options- lay up or trade- as well as the investment options- scrap or buy.
After analyzing the pros and cons of each option, he pointed out that the main objective of each shipping company is to be liquid and solvent, by addressing the shipping cyclicality and retaining the corporate ability to make decisions. From the owner's perspective, Mr. Bodouroglou was of the view that one size of vessel does not fit all.
In conclusion, he remarked that shipping companies should retain the freedom of choice, in order to prevent others to take decisions for them.
Mr. Simon Ward considered the theme "Scrap or Trade" from a shipbroker's perspective. He examined why owners sell for scrap, the prospects for demolition in the different sectors and the dilemma owners face when keeping or selling.
Looking at the different sectors, he suggested that older bulk carriers, particularly the smaller sizes had prolonged their lifespan in the boom years, a combination of good maintenance and writing off debt. This made owners reluctant to sell their cash cows, which meant less scrapping.
Therefore it was a combination of over ordering and over age ships that was causing over supply. For tankers he commented that most of the elder ships had been scrapped due to single hull phase put, and as conditions of tankers were much better in recent years due to commercial and regulatory requirements, any scrapping that happens will be caused by market conditions. For containers, he pointed out that line demand and economies of scale would dictate which vessels would become obsolete and therefore candidates for scrap.
He concluded by commenting that if owners are considering selling their older tonnage they should not rule out scrapping as prices are good and counterparty risk is better than many assume. He also pointed out these conditions do not last forever as markets can change quickly and without mercy.
In his presentation Mr. Xiradakis depicted the decreasing age profile of the world fleet in all major shipping sectors and highlighted the why modern tonnage trend has been favorite from all relevant players of the maritime industry i.e. Shipowners, Charterers, Managers, Financiers, Investors, etc.
Then he drew his considerations about the minor and major bulk trades which show an upward trend in their demand, but the tonnage supply in the dry bulk sector seems problematic for the current year and the next. For the tanker sector he pointed out that it is not as problematic as dry bulk but demand drivers do not seem to be there for him in the near future.
Finally he emphasized on the need to start scrapping heavily, calling the old vessels as "toxic acids".
The conclusions drawn from the presentations and from the discussion that followed were that the market conditions still need time to set a balance between the supply of tonnage and the seaborne trade demand. However, the diverse opinions expressed showed that what is right for one company is not for the others, while decisions should be taken on time.
The Conference of the ICS Greek Branch was sponsored by:
AB Maritime S.A.
Capital Shipmanagement Corp.
European Navigation Inc.
Dimitrios K Fotinakis Ltd.
Gac Shipping S.A.
Horizon Tankers Limited S.A.
International Registries Inc.
Marine Plus S.A,
Minerva Marine S.A.,
Springfield Shipping. S.A
Target Marine S.A.,
Tsavliris Salvage Group
Ursachart S.A.
The Institute of Chartered Shipbrokers
The Institute of Chartered Shipbrokers is a recognized worldwide professional organization that represents shipbrokers, ship managers and agents, with 24 branches all over the world. The ICS provides specialized professional education and continues to inform of all developments within the shipping industry. Being a member of the Institute of Chartered Shipbrokers provides guaranteed professionalism in the shipping industry worldwide.
This year, the ICS, celebrates 100 years of promoting professional standards in the shipping industry worldwide.
A professional body such as ICS can provide assurance that staff has been educated at a professional level of competence and through membership continue to maintain high standards of professional knowledge and ethical behavior.
During the conference Mrs. Natalia Margioli, Managing Director of the ICS Greek Branch stated that "This year we had more than 200 companies that entrusted the education of their staff in our institute. Shipping is a very competitive service industry. With greater professionalism comes a reduction in contractual risk".

The Exhibition 'Let's Change Habits... not the Climate' on the island of Psara
--- 31/05/2011
HELMEPA transported its environmental exhibition to the island of Psara so as to raise awareness of the schoolchildren and the few residents of the historic island on the climatic changes that affect us all.
The Mayor, Mr. Konstantinos Vratsanos, inaugurated the exhibition at the Municipality's centre of cultural events on May 25, at the presence of City Council members, teachers, the Environmental Education Coordinator of Chios Prefecture, the Archbishop and writer Ioakim Archontou and residents of the island. HELMEPA was represented by its Director General and staff members of the Environmental Awareness Sector, who guided the guests through the exhibition.
In his address, Mr. Vratsanos said "...the sea has always been a source of wealth and life and has been inextricably linked to the very rich history of our island. We have therefore a sacred obligation to protect it by all means. I believe that this exhibition will mark the beginning of a closer cooperation of our Municipality and our schoolchildren with HELMEPA on environmental protection issues, which are among the major challenges of our times, both on a local and a global level." Thereafter, Mr. Vratsanos thanked HELMEPA for its initiative to operate the exhibition to Psara, in spite of the adversities of the venture.
In his response, Mr. Mitsatsos stated that the exhibition is dedicated to the memory of the late Maria P. Tsakos, daughter of Captain Panagiotis Tsakos, one of HELMEPA's co-founders. The exhibition has been transported to Psara as an offer from the volunteer members of HELMEPA to the people of the island, many of whom as seafarers have known HELMEPA for many years. He also expressed his thanks to the Mayor and all the people of Psara for their participation and promised that HELMEPA will stay into contact with the Municipality so as to keep them always informed of all that happen in the environmental field.
Motivational material, such as posters, was posted and distributed across the island, so that the message of the association?s summer campaign "Seas and Beaches forever Clean", is spread to all visitors.
Honoring Psara, the historic homeland of numerous Greek seafarers and shipowners, HELMEPA handed its flag to the Mayor, as a reminder of its passage from the island.