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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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Sunday, 15 January 12
THE FREIGHT MARKET CONTINUED TO BLEED - VISTAAR
COALspot.com - "The markets continued to bleed with BDI touching almost 1000 points , almost reaching the collapse of 2008 levels," said C ...
Saturday, 14 January 12
GOLDEN MINES TO SUPPLY 4 MIO TONS - INSIDER STORIES
Insider Stories reported that, Coal miner under Sinarmas Group PT Golden Energy Mines Tbk (GEMS), a subsidiary of PT Dian Swastatika Sentosa Tbk (DS ...
Friday, 13 January 12
DIFFICULT START OF 2012 FOR DRY BULK MARKET SEEN HARD TO CHANGE IN THE COURSE OF THE YEAR, UNLESS DEMOLITION PICKS UP
The dry bulk market has been on a freefall this week after a rocky start to the new year. Yesterday, the BDI (Baltic Dry Index) the industry's benc ...
Thursday, 12 January 12
DRY BULK MARKET CRASHING AT START OF THE YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept being on freefall mode yesterday, with the industry's benchmark, the BDI (Baltic Dry Index) losing a massive 5.17% on ...
Wednesday, 11 January 12
NEWBUILDING ORDERS DECLINE, AS SHIP OWNERS REALIZE OVERSUPPLY WILL "KILL" THEM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With 2012 now underway, it will be rather interesting to see how ship owners will play the "newbuilding ordering" card to their favor, as ...
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- London Commodity Brokers - England
- Latin American Coal - Colombia
- Global Green Power PLC Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Coalindo Energy - Indonesia
- Petron Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Wood Mackenzie - Singapore
- Directorate Of Revenue Intelligence - India
- CNBM International Corporation - China
- Mercator Lines Limited - India
- Mercuria Energy - Indonesia
- Interocean Group of Companies - India
- Altura Mining Limited, Indonesia
- Banpu Public Company Limited - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Bhatia International Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Sical Logistics Limited - India
- Energy Development Corp, Philippines
- Bharathi Cement Corporation - India
- Electricity Authority, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Dalmia Cement Bharat India
- Tamil Nadu electricity Board
- Port Waratah Coal Services - Australia
- Wilmar Investment Holdings
- Indonesian Coal Mining Association
- Indika Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- McConnell Dowell - Australia
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- Independent Power Producers Association of India
- Barasentosa Lestari - Indonesia
- Singapore Mercantile Exchange
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- Intertek Mineral Services - Indonesia
- PowerSource Philippines DevCo
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- The Treasury - Australian Government
- Heidelberg Cement - Germany
- Chettinad Cement Corporation Ltd - India
- Minerals Council of Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- Economic Council, Georgia
- Globalindo Alam Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karaikal Port Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Oldendorff Carriers - Singapore
- San Jose City I Power Corp, Philippines
- CIMB Investment Bank - Malaysia
- Ministry of Finance - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- India Bulls Power Limited - India
- New Zealand Coal & Carbon
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- The University of Queensland
- Iligan Light & Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Malabar Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Borneo Indobara - Indonesia
- Australian Coal Association
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- Makarim & Taira - Indonesia
- Gujarat Sidhee Cement - India
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- Kaltim Prima Coal - Indonesia
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Mjunction Services Limited - India
- Planning Commission, India
- South Luzon Thermal Energy Corporation
- Global Coal Blending Company Limited - Australia
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Videocon Industries ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Deloitte Consulting - India
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Java Power - Indonesia
- Ministry of Transport, Egypt
- Siam City Cement PLC, Thailand
- GAC Shipping (India) Pvt Ltd
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- Straits Asia Resources Limited - Singapore
- Bukit Baiduri Energy - Indonesia
- Lanco Infratech Ltd - India
- Kumho Petrochemical, South Korea
- SN Aboitiz Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- Australian Commodity Traders Exchange
- Sojitz Corporation - Japan
- Maharashtra Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- VISA Power Limited - India
- Vedanta Resources Plc - India
- Star Paper Mills Limited - India
- International Coal Ventures Pvt Ltd - India
- ICICI Bank Limited - India
- Bayan Resources Tbk. - Indonesia
- Vizag Seaport Private Limited - India
- Baramulti Group, Indonesia
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Kepco SPC Power Corporation, Philippines
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Energy - Thailand
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- Parry Sugars Refinery, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- MS Steel International - UAE
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- IHS Mccloskey Coal Group - USA
- Orica Australia Pty. Ltd.
- Chamber of Mines of South Africa
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Cigading International Bulk Terminal - Indonesia
- Central Electricity Authority - India
- Eastern Coal Council - USA
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Sindya Power Generating Company Private Ltd
- IEA Clean Coal Centre - UK
- Pipit Mutiara Jaya. PT, Indonesia
- Mintek Dendrill Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- PNOC Exploration Corporation - Philippines
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Indian Oil Corporation Limited
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Parliament of New Zealand
- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Jaiprakash Power Ventures ltd
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- PetroVietnam Power Coal Import and Supply Company
- Cement Manufacturers Association - India
- Simpson Spence & Young - Indonesia
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