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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, 15 May 12
POTENTIAL BOOM OF CHINAS COAL IMPORTS COULD PROVIDE FURTHER SUPPORT TO DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has been moving sideways during the past week with the industry’s benchmark, the Baltic Dry Index (BDI) losing 0.53% on th ...
Saturday, 12 May 12
THE SHIPPING MARKET IS UNLIKELY TO SEE A REBOUND ANYTIME SOON - VISTAAR SINGAPORE
COALspot.com - The BDI softened this week and it was down by 1.64 pct closing at 1,138 points.
The cape index was up by 2.41 pct closing at 1,61 ...
Friday, 11 May 12
POLITICAL CHANGES COULD LEAD TO TEMPORARY HALT IN SHIPPING INVESTMENTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The potential of changes of political leadership in many of the world’s leading economies could very well lead to significant shifts in the di ...
Thursday, 10 May 12
DRY BULK ERRATIC ON LACK OF DIRECTION - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept up its erratic behavior as it went down again during yesterday’s session, on a lack of direct guidance in terms o ...
Wednesday, 09 May 12
COAL INDIA SIGNS FSAS WITH 13 POWER UNITS SO FAR - PTI
Press Trust of India has reported that, coal India has so far entered into fuel supply pacts with 13 power units, including Reliance Power's Rosa P ...
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- TNB Fuel Sdn Bhd - Malaysia
- Mercuria Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Trasteel International SA, Italy
- Salva Resources Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Binh Thuan Hamico - Vietnam
- Barasentosa Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Chamber of Mines of South Africa
- London Commodity Brokers - England
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- Indogreen Group - Indonesia
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- Krishnapatnam Port Company Ltd. - India
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- McConnell Dowell - Australia
- Vizag Seaport Private Limited - India
- Coalindo Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- Ministry of Mines - Canada
- Straits Asia Resources Limited - Singapore
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- Electricity Generating Authority of Thailand
- Agrawal Coal Company - India
- Economic Council, Georgia
- Heidelberg Cement - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Finance - Indonesia
- Rio Tinto Coal - Australia
- Essar Steel Hazira Ltd - India
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- Thiess Contractors Indonesia
- India Bulls Power Limited - India
- Central Electricity Authority - India
- Bukit Makmur.PT - Indonesia
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Goldman Sachs - Singapore
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- Thai Mozambique Logistica
- Metalloyd Limited - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- Bhushan Steel Limited - India
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
- Timah Investasi Mineral - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Bangladesh Power Developement Board
- Bukit Asam (Persero) Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Maharashtra Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- Merrill Lynch Commodities Europe
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- Renaissance Capital - South Africa
- South Luzon Thermal Energy Corporation
- Indika Energy - Indonesia
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Borneo Indobara - Indonesia
- Intertek Mineral Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Coastal Gujarat Power Limited - India
- Antam Resourcindo - Indonesia
- Therma Luzon, Inc, Philippines
- Ambuja Cements Ltd - India
- Coal and Oil Company - UAE
- International Coal Ventures Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- ICICI Bank Limited - India
- Uttam Galva Steels Limited - India
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- Gujarat Mineral Development Corp Ltd - India
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- Savvy Resources Ltd - HongKong
- Karaikal Port Pvt Ltd - India
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- San Jose City I Power Corp, Philippines
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Edison Trading Spa - Italy
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- The Treasury - Australian Government
- Aditya Birla Group - India
- The State Trading Corporation of India Ltd
- Minerals Council of Australia
- Leighton Contractors Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- Latin American Coal - Colombia
- Georgia Ports Authority, United States
- Planning Commission, India
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Iligan Light & Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- LBH Netherlands Bv - Netherlands
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
- Kepco SPC Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kumho Petrochemical, South Korea
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhoruka Overseas - Indonesia
- Orica Australia Pty. Ltd.
- AsiaOL BioFuels Corp., Philippines
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Lanco Infratech Ltd - India
- Dalmia Cement Bharat India
- VISA Power Limited - India
- Africa Commodities Group - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jaiprakash Power Ventures ltd
- Meenaskhi Energy Private Limited - India
- Pendopo Energi Batubara - Indonesia
- ASAPP Information Group - India
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- PTC India Limited - India
- Bulk Trading Sa - Switzerland
- Jindal Steel & Power Ltd - India
- The University of Queensland
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- Interocean Group of Companies - India
- Tamil Nadu electricity Board
- Carbofer General Trading SA - India
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- Riau Bara Harum - Indonesia
- MS Steel International - UAE
- Global Coal Blending Company Limited - Australia
- Medco Energi Mining Internasional
- CIMB Investment Bank - Malaysia
- Cement Manufacturers Association - India
- Neyveli Lignite Corporation Ltd, - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- Videocon Industries ltd - India
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Central Java Power - Indonesia
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Standard Chartered Bank - UAE
- Miang Besar Coal Terminal - Indonesia
- Australian Commodity Traders Exchange
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