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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, 26 January 12
ABM INVESTAMA SEALS US$100 MIO CONTRACT - INSIDER STORIES
Insider Stories reported that, PT Reswara Minergi Hartama, a subsidary of PT ABM Investama Tbk (ABMM), has sealed a 2 million tons of coal export co ...
Thursday, 26 January 12
DRY BULK MARKETS DOWNFALL KNOWS NO LIMITS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market’s demise seems to have no visible end, as China’s Lunar Year Holidays continue this week, thus leaving demand with n ...
Wednesday, 25 January 12
CLEAN AND CLEAR MINING PERMITS TO BE COMPLETED END OF 2012 - BISNIS.COM
Bisnis.com reported that, the government plans to announce 700 mining permits with "clean and clear" status without overlapping on other p ...
Tuesday, 24 January 12
ANOTHER SEVERE DROP IN THE CAPESIZE - BRS
The lunar year celebrations and the high number of new building deliveries (more than 35 Capes so far in January as owners push 2011 deliveries into ...
Tuesday, 24 January 12
BUKIT ASAM FY11 NET PROFIT SURGES 50% - INSIDER STORIES
Insider Stories reported that, the state-controlled PT Bukit Asam Tbk (PTBA) estimated to book Rp3 trillion (approximately US$ 335,570,469) net prof ...
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- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Antam Resourcindo - Indonesia
- Tamil Nadu electricity Board
- Thai Mozambique Logistica
- Global Business Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- Karaikal Port Pvt Ltd - India
- London Commodity Brokers - England
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- Parliament of New Zealand
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Latin American Coal - Colombia
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- Deloitte Consulting - India
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Bangladesh Power Developement Board
- Gujarat Mineral Development Corp Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Power Finance Corporation Ltd., India
- AsiaOL BioFuels Corp., Philippines
- PTC India Limited - India
- Timah Investasi Mineral - Indoneisa
- CIMB Investment Bank - Malaysia
- Georgia Ports Authority, United States
- Intertek Mineral Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Manunggal Multi Energi - Indonesia
- Makarim & Taira - Indonesia
- Siam City Cement - Thailand
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Coastal Gujarat Power Limited - India
- VISA Power Limited - India
- IEA Clean Coal Centre - UK
- Kaltim Prima Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Bayan Resources Tbk. - Indonesia
- Pendopo Energi Batubara - Indonesia
- Marubeni Corporation - India
- Eastern Coal Council - USA
- Tata Chemicals Ltd - India
- White Energy Company Limited
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Standard Chartered Bank - UAE
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Central Java Power - Indonesia
- Central Electricity Authority - India
- Parry Sugars Refinery, India
- Australian Coal Association
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- Energy Development Corp, Philippines
- Bulk Trading Sa - Switzerland
- Bharathi Cement Corporation - India
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- Minerals Council of Australia
- Anglo American - United Kingdom
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chamber of Mines of South Africa
- Siam City Cement PLC, Thailand
- Medco Energi Mining Internasional
- Port Waratah Coal Services - Australia
- Chettinad Cement Corporation Ltd - India
- Borneo Indobara - Indonesia
- Mercuria Energy - Indonesia
- Indian Oil Corporation Limited
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- Ambuja Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- McConnell Dowell - Australia
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Lanco Infratech Ltd - India
- LBH Netherlands Bv - Netherlands
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Global Coal Blending Company Limited - Australia
- Coal and Oil Company - UAE
- Videocon Industries ltd - India
- Ind-Barath Power Infra Limited - India
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- The University of Queensland
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Independent Power Producers Association of India
- Directorate Of Revenue Intelligence - India
- Coalindo Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Sinarmas Energy and Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- PNOC Exploration Corporation - Philippines
- Malabar Cements Ltd - India
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
- PetroVietnam Power Coal Import and Supply Company
- Vijayanagar Sugar Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Rio Tinto Coal - Australia
- Interocean Group of Companies - India
- Toyota Tsusho Corporation, Japan
- Essar Steel Hazira Ltd - India
- European Bulk Services B.V. - Netherlands
- Energy Link Ltd, New Zealand
- Riau Bara Harum - Indonesia
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Bhushan Steel Limited - India
- ASAPP Information Group - India
- Romanian Commodities Exchange
- Star Paper Mills Limited - India
- Indika Energy - Indonesia
- Posco Energy - South Korea
- GMR Energy Limited - India
- Mjunction Services Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- New Zealand Coal & Carbon
- Jindal Steel & Power Ltd - India
- SN Aboitiz Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Kapuas Tunggal Persada - Indonesia
- Singapore Mercantile Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Eastern Energy - Thailand
- Bhatia International Limited - India
- Sarangani Energy Corporation, Philippines
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- Planning Commission, India
- Bhoruka Overseas - Indonesia
- Ministry of Mines - Canada
- Economic Council, Georgia
- Indian Energy Exchange, India
- Kideco Jaya Agung - Indonesia
- Africa Commodities Group - South Africa
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Baramulti Group, Indonesia
- Oldendorff Carriers - Singapore
- San Jose City I Power Corp, Philippines
- Metalloyd Limited - United Kingdom
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Uttam Galva Steels Limited - India
- Sojitz Corporation - Japan
- OPG Power Generation Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Ministry of Finance - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- Meenaskhi Energy Private Limited - India
- Bukit Baiduri Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
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