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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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Monday, 02 April 12
BANGLADESH EYEING INDONESIA FOR COAL
COALspot.com - The high level executives of Center for Environmental and Geographic Information Services (CEGIS) of Bangladesh is visiting Ind ...
Monday, 02 April 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The first quarter of the New Year ended with the BDI standing 42% above from the 26 years’ bottom low of 662 points on February 1st, and a pos ...
Saturday, 31 March 12
THE BDI CONTINUED TO MOVE UPWARD - VISTAAR
COALspot.com - The BDI continued to move upward and rose by 2.86 pct closing at 934 points.
The cape index was up by 3.14 pct closing at 1,412 po ...
Saturday, 31 March 12
SRI LANKA IMPORTS 152,555 MT OF INDONESIAN COAL IN FEBRUARY
COALspot.com: Indonesia, the world largest coal exporter, shipped 27.126* million tons of coal in February 2012, compared to 28.21* million to ...
Friday, 30 March 12
RECOND NUMBERS SURROUNDING THE SUPRAMAX DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Last year proved to be both a record year in the number of deliveries of dry bulkers between 40,000dwt and 64,000dwt, as well as a record year in th ...
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- Indogreen Group - Indonesia
- Deloitte Consulting - India
- Mjunction Services Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Tamil Nadu electricity Board
- Coastal Gujarat Power Limited - India
- Kumho Petrochemical, South Korea
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- Bhoruka Overseas - Indonesia
- Global Coal Blending Company Limited - Australia
- Billiton Holdings Pty Ltd - Australia
- Interocean Group of Companies - India
- Power Finance Corporation Ltd., India
- Bukit Makmur.PT - Indonesia
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Xindia Steels Limited - India
- Ministry of Transport, Egypt
- Petron Corporation, Philippines
- Vizag Seaport Private Limited - India
- Price Waterhouse Coopers - Russia
- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Formosa Plastics Group - Taiwan
- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- CIMB Investment Bank - Malaysia
- India Bulls Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Altura Mining Limited, Indonesia
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- Toyota Tsusho Corporation, Japan
- Banpu Public Company Limited - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
- Siam City Cement - Thailand
- GMR Energy Limited - India
- Agrawal Coal Company - India
- TNB Fuel Sdn Bhd - Malaysia
- Edison Trading Spa - Italy
- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- IEA Clean Coal Centre - UK
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
- Riau Bara Harum - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Global Green Power PLC Corporation, Philippines
- Meralco Power Generation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Energy Development Corp, Philippines
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- San Jose City I Power Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Georgia Ports Authority, United States
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- Dalmia Cement Bharat India
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Indika Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Metalloyd Limited - United Kingdom
- MS Steel International - UAE
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- Makarim & Taira - Indonesia
- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Independent Power Producers Association of India
- Samtan Co., Ltd - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- Singapore Mercantile Exchange
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Salva Resources Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- The University of Queensland
- Kapuas Tunggal Persada - Indonesia
- Intertek Mineral Services - Indonesia
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- Globalindo Alam Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Trasteel International SA, Italy
- TeaM Sual Corporation - Philippines
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- Ministry of Mines - Canada
- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- European Bulk Services B.V. - Netherlands
- Sojitz Corporation - Japan
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Karaikal Port Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- Ceylon Electricity Board - Sri Lanka
- Kaltim Prima Coal - Indonesia
- VISA Power Limited - India
- Economic Council, Georgia
- GAC Shipping (India) Pvt Ltd
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Africa Commodities Group - South Africa
- Cigading International Bulk Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Eastern Coal Council - USA
- Planning Commission, India
- Videocon Industries ltd - India
- Simpson Spence & Young - Indonesia
- Jaiprakash Power Ventures ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kobexindo Tractors - Indoneisa
- SMG Consultants - Indonesia
- Australian Coal Association
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
- Goldman Sachs - Singapore
- Renaissance Capital - South Africa
- Standard Chartered Bank - UAE
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- London Commodity Brokers - England
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Aboitiz Power Corporation - Philippines
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- SMC Global Power, Philippines
- PTC India Limited - India
- Romanian Commodities Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Cement Manufacturers Association - India
- Essar Steel Hazira Ltd - India
- Bulk Trading Sa - Switzerland
- CNBM International Corporation - China
- Anglo American - United Kingdom
- Orica Mining Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bhushan Steel Limited - India
- LBH Netherlands Bv - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Central Electricity Authority - India
- Parliament of New Zealand
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- Directorate General of MIneral and Coal - Indonesia
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- Wilmar Investment Holdings
- Miang Besar Coal Terminal - Indonesia
- Minerals Council of Australia
- New Zealand Coal & Carbon
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