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Friday, 06 April 12
DRY BULK MARKET SWIFT TO HALT FALL ON RENEWED DEMAND FOR CAPESIZES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 The dry bulk managed to put a stop to the recent falls, which came as a result of a lacklustre demand for smaller vessel sizes. Although this trend has remained the same, the return of Chinese charterers from their three-day holidays marked a stronger demand for Capesizes yesterday, which in turn was enough to offset the lack of interest for smaller vessels and lead the market to higher ground. The Baltic Dry Index (BDI) was up by 0..22% to 928 points yesterday, with Capesizes gaining 2.17% on the day and reaching 1,507 points. By contrast, the demise of the Supramax market was again evident, with the relative index losing 1.66%, while Panamaxes were also down by 0.67%.
Detailing the oversupply issues which have caused the dry bulk market to retreat to such low levels since the start of the year, Intermodal’s Theodore Ntalakos said that “the freight market and other circumstances were quite convenient for many shipowners who while acting independently and rationally consulting their own self-interest, ordered new buildings even when it was clear that in the long-term the excessive tonnage would eventually suffocate the freight market. It is a real-life example of game theory that shows why two or more individuals might not cooperate, even if it is in their best interest to do so” said Mr. Ntalakos.
He went on to give an example to make his case. “Say we have one shipowner ( Shipowner A) and all the rest shipowners (Shipowner B). Each of their strategy is either to expand by ordering the new fuel efficient vessels or not to order and buy a vessel from the second hand market. We have four possible scenarios:
I. If Shipowner A orders and no one else does then he will get the benefit of new designs, and earn say $10, B stays behind and earns $1
II. If both A and B order then they lose the advantage and they earn very little - $2,
III. If no one orders then they earn moderately from their existing fleet - $5 each, and
IV. If shipowner A does not order but 'B' orders then 'A' will earn very little because the charterers will prefer B's ECO ships – A earns $1, B earns $10.
Here, regardless of what the other decides, each shipowner gets a higher pay-off by ordering new vessels:
I. If B does not order, the payoffs for A are $5 or $10 so he will always chose $10 i.e to order.
II. If B orders, the payoffs for A are $1 or $2 so he will always chose $2 i.e to order
The game is symmetric so Shipower B would always act the same way which means that both shipowers would order new vessels. Since both rational owners decide to order new vessels each receives a lower reward than if both were not to order!! So, rational decision-making results being worse off than if each chose not to order and accept to earn less. As the two shipowners can’t see what the others are doing and cannot play a cooperative game, they will decide to maximize their pay-off and always proceed with orders” said Mr. Ntalakos in a rather interesting undertaking.
He concluded his analysis by stating “we need however to point out that the new ECO ships especially with the current restrain on finance, will only be a small part of the total fleet and orderbook and it will take years to play a substantial part and drive the older vessels out of the market, so we expect owners who order such vessels with today's new builiding and bunker prices to have the competitive advantage for the years to come.
So, there you have it, Shipping is a non-cooperative game. Then why do pools exist? Even in pools if each member's interest to put the next (and succeeding) vessel he acquires into the pool and the demand is limited then the quality of the common is damaged for everybody. So like everything else in life one needs to find the proper equilibrium between cooperating and looking after one's self-interest” he said.
Source: Nikos Roussanoglou, Hellenic Shipping
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Tuesday, 04 September 12
SHIP OWNERS' COMPETITION LEADS TO TANKER FIXTURES BELOW OPERATING COSTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Ship owners operating in the VLCC tanker markets are increasingly finding it difficult to obtain even breakeven rates for their vessels, as competit ...
Tuesday, 04 September 12
ORPHEUS SECURES ADDITIONAL SIGNIFICANT KINTAP COAL PROJECT IN SOUTH KALIMANTAN
COALspot.com - Indonesian coal producer, Orpheus Energy (ASX:OEG) has announced that it has secured a 50% equity ownership in an additional tenement ...
Monday, 03 September 12
SHIPOWNERS TO WAIT FOR FURTHER PRICE REDUCTIONS IN THE SECOND HAND VESSEL MARKETS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With September now upon us, shipbrokers are looking towards an interesting winter season, as ship owners are looking to capitalize on more second ha ...
Sunday, 02 September 12
ADAROS COAL ROYALTIES TO THE GOVERNMENT INCREASED BY 10.5 PERCENT Y-O-Y TO US$196.8 MILLION
COALspot.com - PT Adaro Energy Tbk (IDX: ADRO), the second largest power plant coal producer in Indonesia, announced its consolidated auditor-review ...
Saturday, 01 September 12
FALLING PRICES; BLEEDING MINERS
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for October 2012 delivery lost 4.070 percent and 0.422 percent respectively on W-o-W and D- ...
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- Sojitz Corporation - Japan
- Kapuas Tunggal Persada - Indonesia
- South Luzon Thermal Energy Corporation
- Bukit Makmur.PT - Indonesia
- Coal and Oil Company - UAE
- Aditya Birla Group - India
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- Rio Tinto Coal - Australia
- Petron Corporation, Philippines
- Deloitte Consulting - India
- Kartika Selabumi Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- VISA Power Limited - India
- McConnell Dowell - Australia
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- Banpu Public Company Limited - Thailand
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- Binh Thuan Hamico - Vietnam
- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
- Electricity Authority, New Zealand
- Ministry of Transport, Egypt
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- Georgia Ports Authority, United States
- Siam City Cement PLC, Thailand
- Parry Sugars Refinery, India
- Carbofer General Trading SA - India
- Medco Energi Mining Internasional
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Timah Investasi Mineral - Indoneisa
- Thai Mozambique Logistica
- Kalimantan Lumbung Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- Billiton Holdings Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Intertek Mineral Services - Indonesia
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- Thiess Contractors Indonesia
- Ind-Barath Power Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Mining Services - Indonesia
- Formosa Plastics Group - Taiwan
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- ICICI Bank Limited - India
- Mjunction Services Limited - India
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Singapore Mercantile Exchange
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- IEA Clean Coal Centre - UK
- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- Semirara Mining and Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Energy Link Ltd, New Zealand
- Aboitiz Power Corporation - Philippines
- New Zealand Coal & Carbon
- Essar Steel Hazira Ltd - India
- GVK Power & Infra Limited - India
- Bhoruka Overseas - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Vizag Seaport Private Limited - India
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- IHS Mccloskey Coal Group - USA
- Salva Resources Pvt Ltd - India
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- Vijayanagar Sugar Pvt Ltd - India
- MS Steel International - UAE
- Cement Manufacturers Association - India
- PTC India Limited - India
- Xindia Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vedanta Resources Plc - India
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- Parliament of New Zealand
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Heidelberg Cement - Germany
- Wood Mackenzie - Singapore
- Borneo Indobara - Indonesia
- Bulk Trading Sa - Switzerland
- Dalmia Cement Bharat India
- Global Coal Blending Company Limited - Australia
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
- Coalindo Energy - Indonesia
- Ambuja Cements Ltd - India
- Goldman Sachs - Singapore
- Eastern Coal Council - USA
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sindya Power Generating Company Private Ltd
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- SMC Global Power, Philippines
- Bhushan Steel Limited - India
- PowerSource Philippines DevCo
- PetroVietnam Power Coal Import and Supply Company
- Oldendorff Carriers - Singapore
- Marubeni Corporation - India
- Wilmar Investment Holdings
- Commonwealth Bank - Australia
- Planning Commission, India
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bhatia International Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Bharathi Cement Corporation - India
- Kobexindo Tractors - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Interocean Group of Companies - India
- Videocon Industries ltd - India
- Anglo American - United Kingdom
- Altura Mining Limited, Indonesia
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Meralco Power Generation, Philippines
- Indian Oil Corporation Limited
- Standard Chartered Bank - UAE
- The Treasury - Australian Government
- Australian Coal Association
- Minerals Council of Australia
- OPG Power Generation Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Indo Tambangraya Megah - Indonesia
- Central Java Power - Indonesia
- Romanian Commodities Exchange
- Barasentosa Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- Ministry of Finance - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Rashtriya Ispat Nigam Limited - India
- Bukit Baiduri Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- Jaiprakash Power Ventures ltd
- The University of Queensland
- Global Green Power PLC Corporation, Philippines
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Uttam Galva Steels Limited - India
- Port Waratah Coal Services - Australia
- Karbindo Abesyapradhi - Indoneisa
- Toyota Tsusho Corporation, Japan
- Semirara Mining Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- Iligan Light & Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Renaissance Capital - South Africa
- CNBM International Corporation - China
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- Eastern Energy - Thailand
- Independent Power Producers Association of India
- Asmin Koalindo Tuhup - Indonesia
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