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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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Wednesday, 04 January 12
NEWBUILDING ORDERS PICKED UP IN 2011, BUT 2012 EXPECTED TO BE A DIFFERENT STORY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the BDI (Baltic Dry Index) starting the year on a sour note, losing 114 points and ending yesterday’s session, the first of the new year, ...
Wednesday, 04 January 12
MAHAGENCO TO IMPORT LOW MOISTURE COAL
COALspot.com - Maharashtra State Power Generation Co. Ltd. is the state power generation utility owned by Government of Maharashtra, intends to proc ...
Tuesday, 03 January 12
INDONESIA COAL REFERENCE PRICE FELL AGAIN
COALspot.com - Ministry of Energy and Mineral Resources of Indonesia has sets the January 2012 coal reference price at US$ 109.29 per ton or US$ 3.3 ...
Tuesday, 03 January 12
WHICH WAY WILL THE DRY BULK MARKET HEAD ON FIRST WEEK OF THE YEAR? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Dry bulk ship owners will be wondering which way will the BDI (Baltic Dry Index), the industry’s benchmark, will head during the first days of ...
Monday, 02 January 12
THE PROMISE OF INDIA: A BRIEF INTERRUPTION? - CLARKSONS / HELLENIC SHIPPING
Future growth in Indian seaborne coal imports has sometimes been considered as one of the largest potential upsides in the currently oversupplied dr ...
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- Bulk Trading Sa - Switzerland
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- Kalimantan Lumbung Energi - Indonesia
- Energy Development Corp, Philippines
- Ambuja Cements Ltd - India
- Africa Commodities Group - South Africa
- Bukit Makmur.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- McConnell Dowell - Australia
- Jorong Barutama Greston.PT - Indonesia
- Eastern Energy - Thailand
- Madhucon Powers Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Uttam Galva Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- Gujarat Sidhee Cement - India
- The Treasury - Australian Government
- Bukit Asam (Persero) Tbk - Indonesia
- Georgia Ports Authority, United States
- GAC Shipping (India) Pvt Ltd
- Alfred C Toepfer International GmbH - Germany
- Ceylon Electricity Board - Sri Lanka
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Savvy Resources Ltd - HongKong
- Anglo American - United Kingdom
- Semirara Mining Corp, Philippines
- Thiess Contractors Indonesia
- PNOC Exploration Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Mjunction Services Limited - India
- TeaM Sual Corporation - Philippines
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Riau Bara Harum - Indonesia
- Agrawal Coal Company - India
- PowerSource Philippines DevCo
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- Posco Energy - South Korea
- Star Paper Mills Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wilmar Investment Holdings
- Australian Coal Association
- Baramulti Group, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- Latin American Coal - Colombia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- Central Electricity Authority - India
- Metalloyd Limited - United Kingdom
- Ind-Barath Power Infra Limited - India
- Meralco Power Generation, Philippines
- Globalindo Alam Lestari - Indonesia
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- Eastern Coal Council - USA
- Coalindo Energy - Indonesia
- CNBM International Corporation - China
- Parry Sugars Refinery, India
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Coal and Oil Company - UAE
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- Indian Energy Exchange, India
- Indogreen Group - Indonesia
- Indika Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Siam City Cement - Thailand
- Jaiprakash Power Ventures ltd
- Petrochimia International Co. Ltd.- Taiwan
- Binh Thuan Hamico - Vietnam
- White Energy Company Limited
- SMC Global Power, Philippines
- Independent Power Producers Association of India
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Videocon Industries ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- Chamber of Mines of South Africa
- India Bulls Power Limited - India
- Vedanta Resources Plc - India
- Merrill Lynch Commodities Europe
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Xindia Steels Limited - India
- ICICI Bank Limited - India
- South Luzon Thermal Energy Corporation
- Carbofer General Trading SA - India
- Heidelberg Cement - Germany
- Antam Resourcindo - Indonesia
- GMR Energy Limited - India
- Attock Cement Pakistan Limited
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- Coastal Gujarat Power Limited - India
- Bhoruka Overseas - Indonesia
- Ministry of Mines - Canada
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Dalmia Cement Bharat India
- Malabar Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Sical Logistics Limited - India
- Aditya Birla Group - India
- International Coal Ventures Pvt Ltd - India
- SMG Consultants - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- The University of Queensland
- Formosa Plastics Group - Taiwan
- Indo Tambangraya Megah - Indonesia
- Global Green Power PLC Corporation, Philippines
- Renaissance Capital - South Africa
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Marubeni Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Jindal Steel & Power Ltd - India
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Petron Corporation, Philippines
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- GVK Power & Infra Limited - India
- CIMB Investment Bank - Malaysia
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- London Commodity Brokers - England
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Port Waratah Coal Services - Australia
- Minerals Council of Australia
- Pipit Mutiara Jaya. PT, Indonesia
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- Parliament of New Zealand
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- Sarangani Energy Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Bharathi Cement Corporation - India
- Rio Tinto Coal - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Bangladesh Power Developement Board
- Timah Investasi Mineral - Indoneisa
- Power Finance Corporation Ltd., India
- PTC India Limited - India
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
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