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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, 13 February 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The current sentiment in the dry market resembles memories from the end of 2008, when the Baltic Dry Index closed at the level of 663 points on Dece ...
Sunday, 12 February 12
INDONESIA HAS ISSUED A REGULATION TO BAN THE EXPORT OF UNPROCESSED MINERALS AND METALS BY 2014
COALspot.com - The Indonesian government has finally issued a ministerial decree (7 Year 2012 dated 6 February 2012) to ban the export of unpro ...
Sunday, 12 February 12
THE BALTIC DRY INDEX CLIMBS 10.51%
COALspot.com - "The markets touched record lows not seen since mid 80’s. However there was some good news with signs of market recovery a ...
Saturday, 11 February 12
A SNAPSHOT ON THE ECONOMIC AND SHIPPING ENVIRONMENT - GOLDEN DESTINY
The week was highlighted with intense worries in the eurozone for Greece to secure its second bailout of $130billion by applying a ...
Saturday, 11 February 12
WILL HISTORY REPEAT ITSELF IN THIS SHIPPING CYCLE? - CLARKSONS / HELLENIC SHIPPING
A slightly dubious "best man" joke runs as follows… Best man (giving his wedding speech): "Have you noticed how history repeat ...
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- Price Waterhouse Coopers - Russia
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Salva Resources Pvt Ltd - India
- Carbofer General Trading SA - India
- Oldendorff Carriers - Singapore
- PNOC Exploration Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Interocean Group of Companies - India
- Ministry of Mines - Canada
- Coal and Oil Company - UAE
- Cigading International Bulk Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- Marubeni Corporation - India
- San Jose City I Power Corp, Philippines
- Electricity Generating Authority of Thailand
- London Commodity Brokers - England
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rio Tinto Coal - Australia
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- Mercuria Energy - Indonesia
- Electricity Authority, New Zealand
- Karaikal Port Pvt Ltd - India
- Bhatia International Limited - India
- Posco Energy - South Korea
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- Krishnapatnam Port Company Ltd. - India
- Kohat Cement Company Ltd. - Pakistan
- Global Business Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Economic Council, Georgia
- Thai Mozambique Logistica
- Bukit Baiduri Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- PetroVietnam Power Coal Import and Supply Company
- Petrochimia International Co. Ltd.- Taiwan
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- ICICI Bank Limited - India
- Ministry of Transport, Egypt
- Eastern Energy - Thailand
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Indonesian Coal Mining Association
- Siam City Cement - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Deloitte Consulting - India
- European Bulk Services B.V. - Netherlands
- Kideco Jaya Agung - Indonesia
- Orica Australia Pty. Ltd.
- Coastal Gujarat Power Limited - India
- GMR Energy Limited - India
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- India Bulls Power Limited - India
- Kumho Petrochemical, South Korea
- Heidelberg Cement - Germany
- Grasim Industreis Ltd - India
- Sojitz Corporation - Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Bayan Resources Tbk. - Indonesia
- Goldman Sachs - Singapore
- Mjunction Services Limited - India
- Bukit Makmur.PT - Indonesia
- Malabar Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- AsiaOL BioFuels Corp., Philippines
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Australian Coal Association
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Eastern Coal Council - USA
- VISA Power Limited - India
- SMG Consultants - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Iligan Light & Power Inc, Philippines
- Georgia Ports Authority, United States
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- The University of Queensland
- Global Coal Blending Company Limited - Australia
- Kepco SPC Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tata Chemicals Ltd - India
- Binh Thuan Hamico - Vietnam
- Minerals Council of Australia
- Pendopo Energi Batubara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Attock Cement Pakistan Limited
- Cement Manufacturers Association - India
- Singapore Mercantile Exchange
- The Treasury - Australian Government
- Trasteel International SA, Italy
- PTC India Limited - India
- Ceylon Electricity Board - Sri Lanka
- Independent Power Producers Association of India
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Central Electricity Authority - India
- Agrawal Coal Company - India
- Mercator Lines Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Meralco Power Generation, Philippines
- Sarangani Energy Corporation, Philippines
- Altura Mining Limited, Indonesia
- Jindal Steel & Power Ltd - India
- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- Simpson Spence & Young - Indonesia
- Toyota Tsusho Corporation, Japan
- Barasentosa Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Mintek Dendrill Indonesia
- Banpu Public Company Limited - Thailand
- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- Videocon Industries ltd - India
- Savvy Resources Ltd - HongKong
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- Global Green Power PLC Corporation, Philippines
- Dalmia Cement Bharat India
- Formosa Plastics Group - Taiwan
- Commonwealth Bank - Australia
- Bharathi Cement Corporation - India
- Indogreen Group - Indonesia
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Uttam Galva Steels Limited - India
- Romanian Commodities Exchange
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- Port Waratah Coal Services - Australia
- GAC Shipping (India) Pvt Ltd
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- Antam Resourcindo - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Aboitiz Power Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Meenaskhi Energy Private Limited - India
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Indian Oil Corporation Limited
- Parry Sugars Refinery, India
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Gujarat Sidhee Cement - India
- Petron Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- The State Trading Corporation of India Ltd
- Timah Investasi Mineral - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Bhushan Steel Limited - India
- Parliament of New Zealand
- Energy Development Corp, Philippines
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- Planning Commission, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- Sindya Power Generating Company Private Ltd
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