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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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Saturday, 01 September 12
PANAMAX FREIGHT RATES UNDER PRESSURE FROM LOW DEMAND - VISTAAR
COALspot.com - This week the freight market was weak with mixed results.
The BDI was down by 1.95 pct closing at 703 points, however there was so ...
Friday, 31 August 12
ADVERSE SHIPPING MARKET CONDITIONS SHORTENS LIFE SPAN OF VESSELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The adverse conditions which have been put in place in the world's freight markets, means that ship owners are forced to scrap vessels of a much yo ...
Thursday, 30 August 12
INDO-INDIA, LARGE ECO SUPRA NOW FIXED AT USD 7K FOR DELIVERY SINGAPORE - FEARNLEYS AS
Handy
The Supra market continued its negative trend with little fresh business entering the market. Continent positions fixed around USD 4k for tri ...
Thursday, 30 August 12
DRY BULK MARKET STILL LOOKING OUT FOR BETTER DAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With things in China moving slowly this week, as a result of holidays, it’s no surprise that the latest positive trend in the dry bulk market ...
Wednesday, 29 August 12
COLOMBIA'S MINING BOOM: PART TWO - JOSEPH KIRSCHKE
One of the most prominent casualties of Canada's entry into the Colombian mining sector has been a priest named Jose Reynal-Restrepo. Last Septembe ...
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- Baramulti Group, Indonesia
- Jaiprakash Power Ventures ltd
- Iligan Light & Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Australian Commodity Traders Exchange
- San Jose City I Power Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Carbofer General Trading SA - India
- SMC Global Power, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cigading International Bulk Terminal - Indonesia
- Mercuria Energy - Indonesia
- PTC India Limited - India
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Mintek Dendrill Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Cement Manufacturers Association - India
- Romanian Commodities Exchange
- Agrawal Coal Company - India
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- IHS Mccloskey Coal Group - USA
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Globalindo Alam Lestari - Indonesia
- Thai Mozambique Logistica
- Wilmar Investment Holdings
- Antam Resourcindo - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bukit Makmur.PT - Indonesia
- Renaissance Capital - South Africa
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Attock Cement Pakistan Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- Economic Council, Georgia
- The Treasury - Australian Government
- Videocon Industries ltd - India
- Ind-Barath Power Infra Limited - India
- Deloitte Consulting - India
- Parliament of New Zealand
- Interocean Group of Companies - India
- Aditya Birla Group - India
- Makarim & Taira - Indonesia
- TeaM Sual Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Uttam Galva Steels Limited - India
- Minerals Council of Australia
- Commonwealth Bank - Australia
- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- New Zealand Coal & Carbon
- Siam City Cement PLC, Thailand
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Bangladesh Power Developement Board
- Goldman Sachs - Singapore
- Price Waterhouse Coopers - Russia
- MS Steel International - UAE
- The State Trading Corporation of India Ltd
- Oldendorff Carriers - Singapore
- Meenaskhi Energy Private Limited - India
- Therma Luzon, Inc, Philippines
- Coastal Gujarat Power Limited - India
- London Commodity Brokers - England
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- Latin American Coal - Colombia
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- Indika Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- GVK Power & Infra Limited - India
- Ministry of Transport, Egypt
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- Posco Energy - South Korea
- Holcim Trading Pte Ltd - Singapore
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Energy Link Ltd, New Zealand
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- Merrill Lynch Commodities Europe
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- Indonesian Coal Mining Association
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- Billiton Holdings Pty Ltd - Australia
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Eastern Energy - Thailand
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Wood Mackenzie - Singapore
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- Singapore Mercantile Exchange
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Ambuja Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Petron Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Meralco Power Generation, Philippines
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- Indogreen Group - Indonesia
- Standard Chartered Bank - UAE
- Indian Energy Exchange, India
- Krishnapatnam Port Company Ltd. - India
- Independent Power Producers Association of India
- Miang Besar Coal Terminal - Indonesia
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- Medco Energi Mining Internasional
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- Coal and Oil Company - UAE
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- Semirara Mining and Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- White Energy Company Limited
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- Mercator Lines Limited - India
- Kideco Jaya Agung - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- Siam City Cement - Thailand
- Ministry of Mines - Canada
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- Energy Development Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- CIMB Investment Bank - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Barasentosa Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Binh Thuan Hamico - Vietnam
- Banpu Public Company Limited - Thailand
- Kobexindo Tractors - Indoneisa
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- PNOC Exploration Corporation - Philippines
- Trasteel International SA, Italy
- Salva Resources Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
- GMR Energy Limited - India
- Semirara Mining Corp, Philippines
- Bhatia International Limited - India
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