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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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Thursday, 08 March 12
INDONESIA'S COAL SECTOR CAN BENEFIT FROM CLEARER REGULATIONS - FITCH RATINGS
Fitch Ratings says Indonesia's coal mining sector should continue to see strong growth prospects but can benefit from clearer and more predictable ...
Thursday, 08 March 12
DRY BULK MARKET ON THE RISE; CHINAS COAL IMPORTS COULD INCREASE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept on rising back to healthier levels yesterday, with the BDI (Baltic Dry Index) the industry’s benchmark, marking its 8 ...
Wednesday, 07 March 12
INDONESIA COAL BENCHMARK PRICE GAINS FOR SECOND MONTH
COALspot.com - Indonesia raised the monthly coal reference price for sales in March by 1.15 percent, the second increase since February.
The Mini ...
Wednesday, 07 March 12
INDONESIA TO LIMIT FOREIGN OWNERSHIP IN MINES TO 49 PERCENT WITHIN 10 YEARS OF PRODUCTION
COALspot.com - Foreign holders of mining licenses in Indonesia have to divert 51% of their stakes to Indonesian government or domestic entitie ...
Wednesday, 07 March 12
ASSESS ASIAS POTENTIAL, DEVELOPMENTS AND APPETITE FOR SHALE AT SHALE GAS SUMMIT
Press Release - Assess Asia’s Potential, Developments and Appetite for Shale at Shale Gas Summit on 23-24 Apr, 2012 in Beijing
China is rep ...
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- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Posco Energy - South Korea
- Interocean Group of Companies - India
- The Treasury - Australian Government
- Kumho Petrochemical, South Korea
- Kepco SPC Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- Siam City Cement - Thailand
- Planning Commission, India
- Holcim Trading Pte Ltd - Singapore
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Economic Council, Georgia
- Bhatia International Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- Sical Logistics Limited - India
- CNBM International Corporation - China
- Thiess Contractors Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Power Finance Corporation Ltd., India
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- Agrawal Coal Company - India
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- Meralco Power Generation, Philippines
- Vedanta Resources Plc - India
- Therma Luzon, Inc, Philippines
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Savvy Resources Ltd - HongKong
- Mjunction Services Limited - India
- Georgia Ports Authority, United States
- Tata Chemicals Ltd - India
- Krishnapatnam Port Company Ltd. - India
- The University of Queensland
- Indonesian Coal Mining Association
- PTC India Limited - India
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Xindia Steels Limited - India
- IEA Clean Coal Centre - UK
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Barasentosa Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- The State Trading Corporation of India Ltd
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- Heidelberg Cement - Germany
- Wood Mackenzie - Singapore
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Antam Resourcindo - Indonesia
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- OPG Power Generation Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- Wilmar Investment Holdings
- Larsen & Toubro Limited - India
- Electricity Authority, New Zealand
- Carbofer General Trading SA - India
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Mercator Lines Limited - India
- Dalmia Cement Bharat India
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- Indika Energy - Indonesia
- Electricity Generating Authority of Thailand
- Bangladesh Power Developement Board
- Renaissance Capital - South Africa
- New Zealand Coal & Carbon
- Meenaskhi Energy Private Limited - India
- Aditya Birla Group - India
- Eastern Coal Council - USA
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Global Business Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tamil Nadu electricity Board
- Banpu Public Company Limited - Thailand
- Australian Coal Association
- Gujarat Mineral Development Corp Ltd - India
- Manunggal Multi Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Sojitz Corporation - Japan
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Sakthi Sugars Limited - India
- International Coal Ventures Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Rio Tinto Coal - Australia
- Ind-Barath Power Infra Limited - India
- PowerSource Philippines DevCo
- Madhucon Powers Ltd - India
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Edison Trading Spa - Italy
- GAC Shipping (India) Pvt Ltd
- Kalimantan Lumbung Energi - Indonesia
- ASAPP Information Group - India
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Medco Energi Mining Internasional
- PNOC Exploration Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Commonwealth Bank - Australia
- Standard Chartered Bank - UAE
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- Jaiprakash Power Ventures ltd
- Globalindo Alam Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- TNB Fuel Sdn Bhd - Malaysia
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- Malabar Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Coal and Oil Company - UAE
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thai Mozambique Logistica
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- LBH Netherlands Bv - Netherlands
- Minerals Council of Australia
- Latin American Coal - Colombia
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- Ministry of Finance - Indonesia
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- Altura Mining Limited, Indonesia
- Anglo American - United Kingdom
- Mercuria Energy - Indonesia
- Essar Steel Hazira Ltd - India
- White Energy Company Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Attock Cement Pakistan Limited
- VISA Power Limited - India
- Toyota Tsusho Corporation, Japan
- Global Green Power PLC Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cement Manufacturers Association - India
- Indian Oil Corporation Limited
- Metalloyd Limited - United Kingdom
- Sree Jayajothi Cements Limited - India
- Deloitte Consulting - India
- Neyveli Lignite Corporation Ltd, - India
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