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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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Friday, 10 February 12
TONNAGE KEEPS ON COMING - DREWRY
Drewry Maritime Research’s latest edition of its Dry Bulk Forecaster pulls no punches in its assessment of a market that looks certain to cont ...
Friday, 10 February 12
GIVE PERMIT POWERS TO GOVERNORS: MINERS - THE JAKARTA POST
The Jakarta Post reported that, following clashes between mining companies and local residents, the Indonesian Mining Association (IMA) wants to tra ...
Thursday, 09 February 12
AUSTRALIA'S EPIC TO ACQUIRE 15,500 HA COAL EXPLORATION LICENCES IN EAST KALIMANTAN, INDONESIA
COALspot.com - Epic Resources Limited to acquire two coal concessions in Kutai Barat regency, East Kalimantan, Indonesia.
According to company's ...
Thursday, 09 February 12
RESOURCE ALAM BUYS 28,521HA CONCESSIONS - INSIDER STORIES
Insider Stories reported that, PT Resource Alam Indonesia Tbk (KKGI), owned by Adijanto family, today announced acquisition of 75% interest in PT Ka ...
Tuesday, 07 February 12
DRY BULK MARKET FINALLY STOPS DECLINE, POSTS FIRST RISE IN MORE THAN A MONTH - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
After falling to near record lows, not seen since the mid-80s the dry bulk market has finally stopped its path to "hell", with the industr ...
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- Kalimantan Lumbung Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- Eastern Coal Council - USA
- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Meenaskhi Energy Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Bukit Baiduri Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- Simpson Spence & Young - Indonesia
- Orica Australia Pty. Ltd.
- ASAPP Information Group - India
- Bhatia International Limited - India
- Thai Mozambique Logistica
- SN Aboitiz Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- Independent Power Producers Association of India
- Dalmia Cement Bharat India
- Cigading International Bulk Terminal - Indonesia
- Commonwealth Bank - Australia
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- Grasim Industreis Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Australian Commodity Traders Exchange
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Indian Energy Exchange, India
- Vedanta Resources Plc - India
- Latin American Coal - Colombia
- Marubeni Corporation - India
- Timah Investasi Mineral - Indoneisa
- Thiess Contractors Indonesia
- Holcim Trading Pte Ltd - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Finance - Indonesia
- Baramulti Group, Indonesia
- SMG Consultants - Indonesia
- Central Java Power - Indonesia
- The State Trading Corporation of India Ltd
- Samtan Co., Ltd - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- GN Power Mariveles Coal Plant, Philippines
- Posco Energy - South Korea
- Energy Development Corp, Philippines
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Borneo Indobara - Indonesia
- Siam City Cement - Thailand
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- TNB Fuel Sdn Bhd - Malaysia
- Cement Manufacturers Association - India
- Videocon Industries ltd - India
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- GMR Energy Limited - India
- Anglo American - United Kingdom
- Toyota Tsusho Corporation, Japan
- Merrill Lynch Commodities Europe
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- The University of Queensland
- Bukit Makmur.PT - Indonesia
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Standard Chartered Bank - UAE
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- South Luzon Thermal Energy Corporation
- Indo Tambangraya Megah - Indonesia
- PowerSource Philippines DevCo
- Singapore Mercantile Exchange
- Sical Logistics Limited - India
- Kepco SPC Power Corporation, Philippines
- Renaissance Capital - South Africa
- Trasteel International SA, Italy
- Jindal Steel & Power Ltd - India
- IEA Clean Coal Centre - UK
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Ministry of Mines - Canada
- Africa Commodities Group - South Africa
- Sinarmas Energy and Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- CNBM International Corporation - China
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Bangladesh Power Developement Board
- SMC Global Power, Philippines
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- Xindia Steels Limited - India
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Electricity Generating Authority of Thailand
- Binh Thuan Hamico - Vietnam
- Carbofer General Trading SA - India
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bulk Trading Sa - Switzerland
- Central Electricity Authority - India
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- Electricity Authority, New Zealand
- Port Waratah Coal Services - Australia
- Larsen & Toubro Limited - India
- Indian Oil Corporation Limited
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- Ministry of Transport, Egypt
- Economic Council, Georgia
- Vijayanagar Sugar Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- TeaM Sual Corporation - Philippines
- Riau Bara Harum - Indonesia
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- Global Business Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Tata Chemicals Ltd - India
- Parry Sugars Refinery, India
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- Australian Coal Association
- PTC India Limited - India
- MS Steel International - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Mineral Development Corp Ltd - India
- Romanian Commodities Exchange
- Orica Mining Services - Indonesia
- Coal and Oil Company - UAE
- Straits Asia Resources Limited - Singapore
- Bayan Resources Tbk. - Indonesia
- Sojitz Corporation - Japan
- Mercator Lines Limited - India
- London Commodity Brokers - England
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- Sakthi Sugars Limited - India
- Sindya Power Generating Company Private Ltd
- Interocean Group of Companies - India
- Agrawal Coal Company - India
- Heidelberg Cement - Germany
- CIMB Investment Bank - Malaysia
- Kaltim Prima Coal - Indonesia
- Madhucon Powers Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- Bank of Tokyo Mitsubishi UFJ Ltd
- India Bulls Power Limited - India
- Ambuja Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kideco Jaya Agung - Indonesia
- Therma Luzon, Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- Indonesian Coal Mining Association
- Rio Tinto Coal - Australia
- Energy Link Ltd, New Zealand
- Makarim & Taira - Indonesia
- Deloitte Consulting - India
- Bhushan Steel Limited - India
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