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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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Tuesday, 31 January 12
THERE ARE MANY GOOD REASONS FOR COAL IN GERMANY - DR CIESLIK
COALspot.com - "The year 2011 was again marked by many changes on the markets and energy policies, at times in line with expectations, but at o ...
Tuesday, 31 January 12
DRY BULK MARKET KEEPS FALLING FOR WORST MONTH IN YEARS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market didn't manage to put a halt in its downfall, with the industry's benchmark, the BDI (Baltic Dry Index), posting yet another fa ...
Monday, 30 January 12
CHINA'S HUNGER FOR COAL LEAVES DENT IN PENNSYLVANIA'S SUPPLY - THOMAS LESKIN
With the price of heating oil on the rise, one of Pennsylvania's greatest natural resources - coal - is in high demand, and not just locally.
Et ...
Saturday, 28 January 12
WILL FREIGHT MARKET STABILIZE FROM NEXT WEEK?
COALspot.com - The markets continued to soften with BDI at 663 points down by 15.78 pct closing at 726 points and cape index was down by 5.73 pct cl ...
Friday, 27 January 12
DEMOLITION ACTIVITY NEEDS TO INCREASE SIGNIFICANTLY THIS YEAR AS WELL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The oversupply of vessels in most shipping sectors is so intense that it’s become clear to ship owners that unless they scrap as many of their ...
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- Leighton Contractors Pty Ltd - Australia
- Indogreen Group - Indonesia
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Ambuja Cements Ltd - India
- McConnell Dowell - Australia
- Timah Investasi Mineral - Indoneisa
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- Tamil Nadu electricity Board
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Mercuria Energy - Indonesia
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- TeaM Sual Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Global Green Power PLC Corporation, Philippines
- Grasim Industreis Ltd - India
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- OPG Power Generation Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- Coal and Oil Company - UAE
- Mercator Lines Limited - India
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Madhucon Powers Ltd - India
- Jaiprakash Power Ventures ltd
- Medco Energi Mining Internasional
- Carbofer General Trading SA - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- CNBM International Corporation - China
- Larsen & Toubro Limited - India
- Baramulti Group, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Vizag Seaport Private Limited - India
- GMR Energy Limited - India
- Mjunction Services Limited - India
- Kepco SPC Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Australian Commodity Traders Exchange
- Central Electricity Authority - India
- Essar Steel Hazira Ltd - India
- Singapore Mercantile Exchange
- Aboitiz Power Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- Dalmia Cement Bharat India
- Thai Mozambique Logistica
- San Jose City I Power Corp, Philippines
- Wilmar Investment Holdings
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Sarangani Energy Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Rashtriya Ispat Nigam Limited - India
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Borneo Indobara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Electricity Authority, New Zealand
- Maheswari Brothers Coal Limited - India
- Independent Power Producers Association of India
- Ceylon Electricity Board - Sri Lanka
- Wood Mackenzie - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Central Java Power - Indonesia
- Planning Commission, India
- Intertek Mineral Services - Indonesia
- Formosa Plastics Group - Taiwan
- Maharashtra Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Ministry of Finance - Indonesia
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- Indonesian Coal Mining Association
- Jorong Barutama Greston.PT - Indonesia
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Deloitte Consulting - India
- White Energy Company Limited
- Cement Manufacturers Association - India
- Aditya Birla Group - India
- Cigading International Bulk Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- Edison Trading Spa - Italy
- Romanian Commodities Exchange
- Indika Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Banpu Public Company Limited - Thailand
- Rio Tinto Coal - Australia
- PowerSource Philippines DevCo
- Bhatia International Limited - India
- The University of Queensland
- PTC India Limited - India
- Ind-Barath Power Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- Australian Coal Association
- Chettinad Cement Corporation Ltd - India
- Trasteel International SA, Italy
- Interocean Group of Companies - India
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- European Bulk Services B.V. - Netherlands
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- Goldman Sachs - Singapore
- Renaissance Capital - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- SMG Consultants - Indonesia
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Latin American Coal - Colombia
- Manunggal Multi Energi - Indonesia
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
- Bhushan Steel Limited - India
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- Vedanta Resources Plc - India
- Bukit Makmur.PT - Indonesia
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- Kobexindo Tractors - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petron Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Malabar Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Merrill Lynch Commodities Europe
- Economic Council, Georgia
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Gujarat Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Agrawal Coal Company - India
- Bayan Resources Tbk. - Indonesia
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Riau Bara Harum - Indonesia
- Lanco Infratech Ltd - India
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- Eastern Energy - Thailand
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- Barasentosa Lestari - Indonesia
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- IHS Mccloskey Coal Group - USA
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