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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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Wednesday, 18 July 12
SHIP PRICES HAVE FALLEN RAPIDLY THIS YEAR, FAVORING INVESTORS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The price for a 5 year old Capesize dry bulk carrier of 172,000 dwt has fallen to about $33,4mil from $42.9 at the end of June 2011, while at end of ...
Saturday, 14 July 12
FREIGHT MARKET SEEMS TO BE QUITE VOLATILE - VISTAAR
COALspot.com - The market seems to be quite volatile with the trend changing almost every week. This week all the segments were down except for Pana ...
Friday, 13 July 12
TRANSCOAL MINERGY HAS RECEIVED PMA STATUS IN INDONESIA
COALspot.com - PT Transcoal Minergy (“TCM”) has received official foreign owned company status from the Capital Investment Coordinating ...
Thursday, 12 July 12
LACK OF CAPESIZE DEMAND DRAGS DRY BULK MARKET LOWER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A lack of demand for the larger Capesize dry bulk carriers had as a result the fall of the industry’s benchmark, the BDI (Baltic Dry Index), w ...
Thursday, 12 July 12
RIO TINTO'S SENIOR MANAGEMENT CHANGES
COALspot.com - Rio Tinto is making changes to its senior management team as chief financial officer (CFO) Guy Elliott has decided to retire at the e ...
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- Karbindo Abesyapradhi - Indoneisa
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Tamil Nadu electricity Board
- Rashtriya Ispat Nigam Limited - India
- Directorate Of Revenue Intelligence - India
- Leighton Contractors Pty Ltd - Australia
- Eastern Coal Council - USA
- Ceylon Electricity Board - Sri Lanka
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- Star Paper Mills Limited - India
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- Goldman Sachs - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Essar Steel Hazira Ltd - India
- Economic Council, Georgia
- Edison Trading Spa - Italy
- Baramulti Group, Indonesia
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vedanta Resources Plc - India
- Xindia Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Global Green Power PLC Corporation, Philippines
- Renaissance Capital - South Africa
- The University of Queensland
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Standard Chartered Bank - UAE
- Mintek Dendrill Indonesia
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Holcim Trading Pte Ltd - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Sindya Power Generating Company Private Ltd
- Australian Commodity Traders Exchange
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- The State Trading Corporation of India Ltd
- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- Ministry of Finance - Indonesia
- TeaM Sual Corporation - Philippines
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Bukit Asam (Persero) Tbk - Indonesia
- ICICI Bank Limited - India
- VISA Power Limited - India
- Deloitte Consulting - India
- SMC Global Power, Philippines
- Kartika Selabumi Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- Sojitz Corporation - Japan
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- Krishnapatnam Port Company Ltd. - India
- Videocon Industries ltd - India
- White Energy Company Limited
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Minerals Council of Australia
- Binh Thuan Hamico - Vietnam
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Commonwealth Bank - Australia
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Iligan Light & Power Inc, Philippines
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Attock Cement Pakistan Limited
- Indo Tambangraya Megah - Indonesia
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
- IHS Mccloskey Coal Group - USA
- Vizag Seaport Private Limited - India
- Interocean Group of Companies - India
- Aditya Birla Group - India
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- European Bulk Services B.V. - Netherlands
- Electricity Authority, New Zealand
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- London Commodity Brokers - England
- Karaikal Port Pvt Ltd - India
- Wood Mackenzie - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Billiton Holdings Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Price Waterhouse Coopers - Russia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petron Corporation, Philippines
- Energy Link Ltd, New Zealand
- Kaltim Prima Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- MS Steel International - UAE
- Maheswari Brothers Coal Limited - India
- Power Finance Corporation Ltd., India
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- India Bulls Power Limited - India
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Sidhee Cement - India
- Altura Mining Limited, Indonesia
- Mercator Lines Limited - India
- Bhatia International Limited - India
- Malabar Cements Ltd - India
- Posco Energy - South Korea
- Eastern Energy - Thailand
- Global Coal Blending Company Limited - Australia
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Indika Energy - Indonesia
- Ministry of Transport, Egypt
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- CNBM International Corporation - China
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Banpu Public Company Limited - Thailand
- OPG Power Generation Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Kumho Petrochemical, South Korea
- Heidelberg Cement - Germany
- Mercuria Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- Sinarmas Energy and Mining - Indonesia
- Singapore Mercantile Exchange
- Bhoruka Overseas - Indonesia
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Kalimantan Lumbung Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Bulk Trading Sa - Switzerland
- Jaiprakash Power Ventures ltd
- TNB Fuel Sdn Bhd - Malaysia
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Chamber of Mines of South Africa
- IEA Clean Coal Centre - UK
- Cigading International Bulk Terminal - Indonesia
- Bangladesh Power Developement Board
- CIMB Investment Bank - Malaysia
- Thai Mozambique Logistica
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- Central Electricity Authority - India
- The Treasury - Australian Government
- PNOC Exploration Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Global Business Power Corporation, Philippines
- PTC India Limited - India
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