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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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Wednesday, 14 March 12
GLOBAL THERMAL TRADE FLOW CHANGES WILL ENSURE SECURITY OF THERMAL COAL SUPPLY, ALBEIT AT A HIGH PRICE - WOOD MACKENZIE
Wood Mackenzie Says Global Thermal Trade Flow Changes Will Ensure Security of Thermal Coal Supply, Albeit At a High Price Seaborne thermal demand by ...
Wednesday, 14 March 12
COKAL TAKES ANOTHER STEP IN DEVELOPING INFRASTRUCTURE TO FACILITATE METALLURGICAL COAL PRODUCTION
Global coal group, Cokal Limited (ASX-CKA), has signed Memorandums of Understanding (MoU’s) to develop two river ports and two small scale coa ...
Tuesday, 13 March 12
CLARIFICATION OF GR 24 OF 2012 REQUIRING DIVESTMENT OF FOREIGN OWNERSHIP OVER TIME
ASX Announcement
Global metallurgical coal group, Cokal Limited (ASX-CKA), is responding to the recent announcement of the Indonesian Ministry of ...
Tuesday, 13 March 12
EUROPEAN COAL CONTANGO: FURTHER STEEPNESS REQUIRED TO MAKE LARGE SCALE PHYSICAL TIME SPREAD ARBITRAGE MORE ATTRACTIVE - MISWIN MAHESH, BARCLAYS CAPITAL
COALspot.com - "With the contango between the Y+1 and M+1 ARA delivered contract now averaging above the $14/t level, there is an increasing in ...
Monday, 12 March 12
DELTA DUNIA 1M OVERBURDEN DROPS 3.1% - INSIDER STORIES
Insider Stories reported that, Indonesia's second largest coal mining contractor PT Delta Dunia Makmur Tbk (DOID) reported a 25 million bank ...
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- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- Miang Besar Coal Terminal - Indonesia
- CNBM International Corporation - China
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Coalindo Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- Therma Luzon, Inc, Philippines
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- Tata Chemicals Ltd - India
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- ASAPP Information Group - India
- Karaikal Port Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- Central Java Power - Indonesia
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- San Jose City I Power Corp, Philippines
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kepco SPC Power Corporation, Philippines
- Anglo American - United Kingdom
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- Bangladesh Power Developement Board
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- Vedanta Resources Plc - India
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- Gujarat Sidhee Cement - India
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Central Electricity Authority - India
- SN Aboitiz Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Iligan Light & Power Inc, Philippines
- Indika Energy - Indonesia
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- Vizag Seaport Private Limited - India
- GVK Power & Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- Riau Bara Harum - Indonesia
- Jindal Steel & Power Ltd - India
- Ministry of Finance - Indonesia
- Simpson Spence & Young - Indonesia
- IHS Mccloskey Coal Group - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Coal Blending Company Limited - Australia
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Siam City Cement PLC, Thailand
- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Kobexindo Tractors - Indoneisa
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- Posco Energy - South Korea
- Australian Coal Association
- South Luzon Thermal Energy Corporation
- Larsen & Toubro Limited - India
- Manunggal Multi Energi - Indonesia
- Siam City Cement - Thailand
- Coal and Oil Company - UAE
- Deloitte Consulting - India
- Borneo Indobara - Indonesia
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- The University of Queensland
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- Planning Commission, India
- Toyota Tsusho Corporation, Japan
- ICICI Bank Limited - India
- Bukit Makmur.PT - Indonesia
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- Cement Manufacturers Association - India
- Billiton Holdings Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Economic Council, Georgia
- Carbofer General Trading SA - India
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Mjunction Services Limited - India
- Kaltim Prima Coal - Indonesia
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- Aditya Birla Group - India
- Sojitz Corporation - Japan
- Uttam Galva Steels Limited - India
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- New Zealand Coal & Carbon
- Asmin Koalindo Tuhup - Indonesia
- Petron Corporation, Philippines
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- The Treasury - Australian Government
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Australian Commodity Traders Exchange
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Sinarmas Energy and Mining - Indonesia
- Heidelberg Cement - Germany
- PowerSource Philippines DevCo
- Banpu Public Company Limited - Thailand
- SMG Consultants - Indonesia
- Bukit Baiduri Energy - Indonesia
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- White Energy Company Limited
- Goldman Sachs - Singapore
- Mercator Lines Limited - India
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- CIMB Investment Bank - Malaysia
- Chettinad Cement Corporation Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Indonesian Coal Mining Association
- London Commodity Brokers - England
- Ceylon Electricity Board - Sri Lanka
- Wilmar Investment Holdings
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Dalmia Cement Bharat India
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Thai Mozambique Logistica
- Aboitiz Power Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Sakthi Sugars Limited - India
- Power Finance Corporation Ltd., India
- Orica Mining Services - Indonesia
- Indian Energy Exchange, India
- Salva Resources Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Global Business Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Wood Mackenzie - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Mintek Dendrill Indonesia
- Bhoruka Overseas - Indonesia
- Samtan Co., Ltd - South Korea
- Indogreen Group - Indonesia
- Binh Thuan Hamico - Vietnam
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
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