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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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- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- Sakthi Sugars Limited - India
- Central Electricity Authority - India
- Krishnapatnam Port Company Ltd. - India
- Makarim & Taira - Indonesia
- Cement Manufacturers Association - India
- Ministry of Transport, Egypt
- Billiton Holdings Pty Ltd - Australia
- Goldman Sachs - Singapore
- Kaltim Prima Coal - Indonesia
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- Agrawal Coal Company - India
- Karaikal Port Pvt Ltd - India
- ASAPP Information Group - India
- Planning Commission, India
- India Bulls Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Savvy Resources Ltd - HongKong
- Kepco SPC Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Ceylon Electricity Board - Sri Lanka
- Independent Power Producers Association of India
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Holcim Trading Pte Ltd - Singapore
- Orica Mining Services - Indonesia
- Indian Energy Exchange, India
- Marubeni Corporation - India
- Straits Asia Resources Limited - Singapore
- Meralco Power Generation, Philippines
- Maheswari Brothers Coal Limited - India
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- Iligan Light & Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Kapuas Tunggal Persada - Indonesia
- Eastern Energy - Thailand
- Coastal Gujarat Power Limited - India
- The State Trading Corporation of India Ltd
- Anglo American - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Singapore Mercantile Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Global Green Power PLC Corporation, Philippines
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Xindia Steels Limited - India
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Standard Chartered Bank - UAE
- Chettinad Cement Corporation Ltd - India
- Jaiprakash Power Ventures ltd
- SN Aboitiz Power Inc, Philippines
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- White Energy Company Limited
- South Luzon Thermal Energy Corporation
- Siam City Cement PLC, Thailand
- Maharashtra Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
- Power Finance Corporation Ltd., India
- Uttam Galva Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Sree Jayajothi Cements Limited - India
- Indo Tambangraya Megah - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Renaissance Capital - South Africa
- Barasentosa Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- The University of Queensland
- Mjunction Services Limited - India
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Sical Logistics Limited - India
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- Indian Oil Corporation Limited
- Ambuja Cements Ltd - India
- Heidelberg Cement - Germany
- Intertek Mineral Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Trasteel International SA, Italy
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- Malabar Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- Timah Investasi Mineral - Indoneisa
- Bharathi Cement Corporation - India
- Gujarat Sidhee Cement - India
- Interocean Group of Companies - India
- Madhucon Powers Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rashtriya Ispat Nigam Limited - India
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- IEA Clean Coal Centre - UK
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- Borneo Indobara - Indonesia
- Africa Commodities Group - South Africa
- Minerals Council of Australia
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Global Business Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Energy Development Corp, Philippines
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- GMR Energy Limited - India
- Indonesian Coal Mining Association
- Electricity Authority, New Zealand
- Aditya Birla Group - India
- Baramulti Group, Indonesia
- Formosa Plastics Group - Taiwan
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- McConnell Dowell - Australia
- Posco Energy - South Korea
- LBH Netherlands Bv - Netherlands
- Bhatia International Limited - India
- Videocon Industries ltd - India
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Parry Sugars Refinery, India
- Indika Energy - Indonesia
- Attock Cement Pakistan Limited
- Chamber of Mines of South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Finance - Indonesia
- Commonwealth Bank - Australia
- Directorate General of MIneral and Coal - Indonesia
- VISA Power Limited - India
- Wilmar Investment Holdings
- Australian Coal Association
- The Treasury - Australian Government
- GAC Shipping (India) Pvt Ltd
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- Global Coal Blending Company Limited - Australia
- Sinarmas Energy and Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Deloitte Consulting - India
- Alfred C Toepfer International GmbH - Germany
- Manunggal Multi Energi - Indonesia
- Economic Council, Georgia
- Parliament of New Zealand
- Port Waratah Coal Services - Australia
- Petron Corporation, Philippines
- Vizag Seaport Private Limited - India
- Bulk Trading Sa - Switzerland
- European Bulk Services B.V. - Netherlands
- Directorate Of Revenue Intelligence - India
- Price Waterhouse Coopers - Russia
- CIMB Investment Bank - Malaysia
- Banpu Public Company Limited - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Globalindo Alam Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Pendopo Energi Batubara - Indonesia
- SMC Global Power, Philippines
- Georgia Ports Authority, United States
- Tata Chemicals Ltd - India
- Mintek Dendrill Indonesia
- San Jose City I Power Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Coal and Oil Company - UAE
- Tamil Nadu electricity Board
- Mercuria Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vedanta Resources Plc - India
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