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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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Friday, 04 May 12
DEMOLITION KEY FOR DRY BULK MARKET RECOVERY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The overflow of newbuilding vessels which “spilled over” into 2012 from 2011 brought the dry bulk market to a near collapse level at the ...
Thursday, 03 May 12
DRY BULK MARKET REMAINS INACTIVE, POSTING MILD DECREASE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept retreating this week, although at a very low pace, on the back of a lull in demand. The industry's benchmark, th ...
Thursday, 03 May 12
MINERS DEMAND LEGAL CERTAINTY ON PRE-BAN INTERIM POLICY - THE JAKARTA POST
The Jakarta Post reported that, Mining companies represented by the Indonesian Mining Association (IMA) welcomed the government’s plan to impo ...
Thursday, 03 May 12
HANDY EAST COAST INDIA - CHINA AROUND USD 7000 - FEARNLEYS AS
Handy - Stable demand in the Atlantic offered good rates for the tonnage.
USG/Cont was worth USD 17500 and more. Baltic and Black Sea appeared to ...
Wednesday, 02 May 12
CHINA BLACKOUTS HIGHLIGHT PRICING POLICY WEAKNESS - FITCH
Fitch reported that, the likelihood of further electricity blackouts in China this summer underlines Fitch's view of the basic problem f ...
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- Jorong Barutama Greston.PT - Indonesia
- Bhushan Steel Limited - India
- Indian Energy Exchange, India
- Indian Oil Corporation Limited
- Planning Commission, India
- Central Electricity Authority - India
- Australian Coal Association
- Therma Luzon, Inc, Philippines
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Chamber of Mines of South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- IHS Mccloskey Coal Group - USA
- White Energy Company Limited
- Bangladesh Power Developement Board
- Commonwealth Bank - Australia
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- Bukit Makmur.PT - Indonesia
- Africa Commodities Group - South Africa
- Coal and Oil Company - UAE
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Tamil Nadu electricity Board
- Neyveli Lignite Corporation Ltd, - India
- Borneo Indobara - Indonesia
- Singapore Mercantile Exchange
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- CNBM International Corporation - China
- Mercator Lines Limited - India
- AsiaOL BioFuels Corp., Philippines
- Indonesian Coal Mining Association
- Directorate General of MIneral and Coal - Indonesia
- Electricity Authority, New Zealand
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- Sakthi Sugars Limited - India
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- Altura Mining Limited, Indonesia
- Kideco Jaya Agung - Indonesia
- Power Finance Corporation Ltd., India
- Maheswari Brothers Coal Limited - India
- Lanco Infratech Ltd - India
- Rio Tinto Coal - Australia
- Essar Steel Hazira Ltd - India
- PTC India Limited - India
- Coastal Gujarat Power Limited - India
- Mjunction Services Limited - India
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Merrill Lynch Commodities Europe
- Timah Investasi Mineral - Indoneisa
- Wilmar Investment Holdings
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- Sical Logistics Limited - India
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- Eastern Energy - Thailand
- London Commodity Brokers - England
- Cement Manufacturers Association - India
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- Ind-Barath Power Infra Limited - India
- Aditya Birla Group - India
- The State Trading Corporation of India Ltd
- Renaissance Capital - South Africa
- Bukit Baiduri Energy - Indonesia
- McConnell Dowell - Australia
- Bhatia International Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- PowerSource Philippines DevCo
- New Zealand Coal & Carbon
- Gujarat Mineral Development Corp Ltd - India
- Vedanta Resources Plc - India
- Medco Energi Mining Internasional
- SN Aboitiz Power Inc, Philippines
- India Bulls Power Limited - India
- Bhoruka Overseas - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Toyota Tsusho Corporation, Japan
- MS Steel International - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Dalmia Cement Bharat India
- ICICI Bank Limited - India
- Gujarat Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- Alfred C Toepfer International GmbH - Germany
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- Siam City Cement PLC, Thailand
- Makarim & Taira - Indonesia
- Madhucon Powers Ltd - India
- Global Coal Blending Company Limited - Australia
- Larsen & Toubro Limited - India
- Minerals Council of Australia
- Siam City Cement - Thailand
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Mercuria Energy - Indonesia
- Thai Mozambique Logistica
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- SMG Consultants - Indonesia
- Banpu Public Company Limited - Thailand
- Attock Cement Pakistan Limited
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Parliament of New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Billiton Holdings Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Riau Bara Harum - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Eastern Coal Council - USA
- Semirara Mining and Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Cigading International Bulk Terminal - Indonesia
- ASAPP Information Group - India
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Antam Resourcindo - Indonesia
- Manunggal Multi Energi - Indonesia
- Goldman Sachs - Singapore
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- Latin American Coal - Colombia
- GAC Shipping (India) Pvt Ltd
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Posco Energy - South Korea
- OPG Power Generation Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Uttam Galva Steels Limited - India
- Orica Australia Pty. Ltd.
- The University of Queensland
- Tata Chemicals Ltd - India
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Port Waratah Coal Services - Australia
- Bharathi Cement Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Meralco Power Generation, Philippines
- Central Java Power - Indonesia
- Bayan Resources Tbk. - Indonesia
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Videocon Industries ltd - India
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- Interocean Group of Companies - India
- VISA Power Limited - India
- Baramulti Group, Indonesia
- Globalindo Alam Lestari - Indonesia
- Economic Council, Georgia
- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IEA Clean Coal Centre - UK
- Anglo American - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- Binh Thuan Hamico - Vietnam
- LBH Netherlands Bv - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Ambuja Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- Global Green Power PLC Corporation, Philippines
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