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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, 26 March 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The Baltic Dry Index follows its upward incline for fourth consecutive week by rising to more than 900 points, up by 37% from the bottom low in the ...
Monday, 26 March 12
GOLDEN MINES FY11 REVENUE JUMPS 209% - INSIDER STORIES
Insider Stories reported that, coal miner PT Golden Energy Mines Tbk (GEMS), that is controlled by Sinar Mas Group, recorded a 209% jump in revenue ...
Saturday, 24 March 12
AUSTRALIA'S MINERAL TAX : BENCHMARK FOR OTHER COUNTRIES - SUNIL K KUMBHAT
COALspot.com - Natural resources rich counties like Australia , Indonesia , South Africa , Brazil etc are going through a spectacular resources boom ...
Saturday, 24 March 12
THE AVERAGE CHARTER RATES WAS AT CAPESIZE $ 4,546 PER DAY VS SUPRAMAX / $ 10,819 PER DAY - VISTAAR
COALspot.com - The BDI crossed 900 points this week closing at 908 points up by 3.89 pct. All other sectors were up except for cape index whic ...
Thursday, 22 March 12
ECI-CHINA HANDY RATES ARE AROUND US$ 8000 - FEARNLEYS
Handy
Another positive trend was seen last week with more cargoes entering the market. Skaw-Passero/US Gulf climbed slowly up to USD 3700, while US ...
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- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Pendopo Energi Batubara - Indonesia
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Marubeni Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bulk Trading Sa - Switzerland
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Mining Services - Indonesia
- Parliament of New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Independent Power Producers Association of India
- Videocon Industries ltd - India
- Port Waratah Coal Services - Australia
- The State Trading Corporation of India Ltd
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Siam City Cement PLC, Thailand
- Barasentosa Lestari - Indonesia
- Agrawal Coal Company - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Anglo American - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Goldman Sachs - Singapore
- Leighton Contractors Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Formosa Plastics Group - Taiwan
- Australian Coal Association
- Lanco Infratech Ltd - India
- Bharathi Cement Corporation - India
- Star Paper Mills Limited - India
- The Treasury - Australian Government
- Dalmia Cement Bharat India
- Directorate General of MIneral and Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Ministry of Finance - Indonesia
- Larsen & Toubro Limited - India
- Xindia Steels Limited - India
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sical Logistics Limited - India
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- Ind-Barath Power Infra Limited - India
- Wilmar Investment Holdings
- Kohat Cement Company Ltd. - Pakistan
- Karbindo Abesyapradhi - Indoneisa
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- The University of Queensland
- Antam Resourcindo - Indonesia
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- Deloitte Consulting - India
- Ministry of Mines - Canada
- Medco Energi Mining Internasional
- Jindal Steel & Power Ltd - India
- Iligan Light & Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- Tata Chemicals Ltd - India
- Standard Chartered Bank - UAE
- Global Coal Blending Company Limited - Australia
- Energy Link Ltd, New Zealand
- Kepco SPC Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- TeaM Sual Corporation - Philippines
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- Ministry of Transport, Egypt
- SMG Consultants - Indonesia
- White Energy Company Limited
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- International Coal Ventures Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Baramulti Group, Indonesia
- Trasteel International SA, Italy
- Therma Luzon, Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Tamil Nadu electricity Board
- Edison Trading Spa - Italy
- Savvy Resources Ltd - HongKong
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- Makarim & Taira - Indonesia
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Vedanta Resources Plc - India
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Romanian Commodities Exchange
- Attock Cement Pakistan Limited
- Sindya Power Generating Company Private Ltd
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- VISA Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Minerals Council of Australia
- Altura Mining Limited, Indonesia
- CIMB Investment Bank - Malaysia
- Georgia Ports Authority, United States
- Planning Commission, India
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- Bukit Baiduri Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Malabar Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Kaltim Prima Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- Orica Australia Pty. Ltd.
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ceylon Electricity Board - Sri Lanka
- PTC India Limited - India
- Aditya Birla Group - India
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Kobexindo Tractors - Indoneisa
- Aboitiz Power Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Rio Tinto Coal - Australia
- Kapuas Tunggal Persada - Indonesia
- ASAPP Information Group - India
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- San Jose City I Power Corp, Philippines
- Oldendorff Carriers - Singapore
- Cement Manufacturers Association - India
- Simpson Spence & Young - Indonesia
- Mjunction Services Limited - India
- Chamber of Mines of South Africa
- Ambuja Cements Ltd - India
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Petron Corporation, Philippines
- McConnell Dowell - Australia
- Africa Commodities Group - South Africa
- IEA Clean Coal Centre - UK
- Manunggal Multi Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Heidelberg Cement - Germany
- Global Green Power PLC Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- Chettinad Cement Corporation Ltd - India
- India Bulls Power Limited - India
- Karaikal Port Pvt Ltd - India
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Banpu Public Company Limited - Thailand
- Mercator Lines Limited - India
- Coastal Gujarat Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- Central Electricity Authority - India
- SMC Global Power, Philippines
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- Meralco Power Generation, Philippines
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
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