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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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Sunday, 17 June 12
S7 & S8 ROUTES ARE LIKELY TO BE SOFT NEXT WEEK - VISTAAR
COALspot.com - The BDI gained some increase after continues fall for several weeks.
The BDI increased by 47 points (up by 5.36 pct) closing at 92 ...
Saturday, 16 June 12
INDONESIAN SUB-BITUMINOUS COAL & CFR SOUTH CHINA COAL CONTRACT SWAPS ARE UNDER PRESSURE
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for July deliveries seems to be under pressure this week.&nbs ...
Friday, 15 June 12
CAPESIZE - THE LEVELS THAT DID FIX ARE DOWN W-O-W LEVELS - FEARNLEYS
Handy
Another slow-moving market with rates hovering at same level as last week. US Gulf positions fixed USD 25,000 for trips to Cont/Passero and S ...
Thursday, 14 June 12
SMALLER DRY BULK CARRIERS LIKELY TO FACE MORE CHALLENGES; DEMOLITION ACTIVITY SET FOR RECORD YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest update on the dry bulk markets, BIMCO said that China is partly “failing to deliver” on raw material imports that can affe ...
Wednesday, 13 June 12
LOW COAL PRICES COULD CHANGE SUPPLY SIDE DYNAMICS - FITCH RATINGS
Fitch Ratings believes that the weakness seen in thermal coal prices in recent months should reverse once demand from major importers recovers, alth ...
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- Coalindo Energy - Indonesia
- Australian Coal Association
- Thiess Contractors Indonesia
- Rio Tinto Coal - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- Minerals Council of Australia
- Parliament of New Zealand
- GAC Shipping (India) Pvt Ltd
- Electricity Authority, New Zealand
- Indian Oil Corporation Limited
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- Price Waterhouse Coopers - Russia
- Formosa Plastics Group - Taiwan
- Manunggal Multi Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Meralco Power Generation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Tamil Nadu electricity Board
- Cigading International Bulk Terminal - Indonesia
- Indian Energy Exchange, India
- International Coal Ventures Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- The Treasury - Australian Government
- Agrawal Coal Company - India
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Carbofer General Trading SA - India
- Electricity Generating Authority of Thailand
- Grasim Industreis Ltd - India
- Coal and Oil Company - UAE
- Star Paper Mills Limited - India
- Billiton Holdings Pty Ltd - Australia
- Indika Energy - Indonesia
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- PTC India Limited - India
- Asmin Koalindo Tuhup - Indonesia
- IHS Mccloskey Coal Group - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- Aboitiz Power Corporation - Philippines
- Xindia Steels Limited - India
- Aditya Birla Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement - Thailand
- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Bhatia International Limited - India
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- MS Steel International - UAE
- Borneo Indobara - Indonesia
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Kapuas Tunggal Persada - Indonesia
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- Ministry of Mines - Canada
- Singapore Mercantile Exchange
- PowerSource Philippines DevCo
- The State Trading Corporation of India Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Videocon Industries ltd - India
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- Economic Council, Georgia
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Bhushan Steel Limited - India
- Salva Resources Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Central Electricity Authority - India
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Altura Mining Limited, Indonesia
- SMG Consultants - Indonesia
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- SMC Global Power, Philippines
- India Bulls Power Limited - India
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- Orica Mining Services - Indonesia
- TeaM Sual Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Attock Cement Pakistan Limited
- Parry Sugars Refinery, India
- Medco Energi Mining Internasional
- Semirara Mining Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Sidhee Cement - India
- Larsen & Toubro Limited - India
- The University of Queensland
- New Zealand Coal & Carbon
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
- Sree Jayajothi Cements Limited - India
- Antam Resourcindo - Indonesia
- Coastal Gujarat Power Limited - India
- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- South Luzon Thermal Energy Corporation
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Central Java Power - Indonesia
- Bhoruka Overseas - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Alfred C Toepfer International GmbH - Germany
- Eastern Energy - Thailand
- Port Waratah Coal Services - Australia
- London Commodity Brokers - England
- Bayan Resources Tbk. - Indonesia
- Orica Australia Pty. Ltd.
- Directorate General of MIneral and Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Latin American Coal - Colombia
- Karaikal Port Pvt Ltd - India
- Lanco Infratech Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Malabar Cements Ltd - India
- Savvy Resources Ltd - HongKong
- ASAPP Information Group - India
- Holcim Trading Pte Ltd - Singapore
- Wood Mackenzie - Singapore
- Dalmia Cement Bharat India
- Bulk Trading Sa - Switzerland
- San Jose City I Power Corp, Philippines
- Bangladesh Power Developement Board
- Commonwealth Bank - Australia
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- Gujarat Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- Ministry of Transport, Egypt
- Samtan Co., Ltd - South Korea
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Toyota Tsusho Corporation, Japan
- Sojitz Corporation - Japan
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- GVK Power & Infra Limited - India
- Energy Link Ltd, New Zealand
- Heidelberg Cement - Germany
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- Global Green Power PLC Corporation, Philippines
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Deloitte Consulting - India
- Global Business Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Independent Power Producers Association of India
- Wilmar Investment Holdings
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- VISA Power Limited - India
- Bukit Makmur.PT - Indonesia
- GMR Energy Limited - India
- Mintek Dendrill Indonesia
- Trasteel International SA, Italy
- Power Finance Corporation Ltd., India
- Posco Energy - South Korea
- Metalloyd Limited - United Kingdom
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- Kaltim Prima Coal - Indonesia
- Indogreen Group - Indonesia
- Pendopo Energi Batubara - Indonesia
- OPG Power Generation Pvt Ltd - India
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