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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, 01 January 12
IS INDIA FOLLOWING INDONESIA TO STANDARDIZE COAL PRICES TO GET MAXIMUM BENEFITS?
COALspot.com - Coal India limited, an Indian state owned and world largest coal producer has introduced gross calorific value (GCV) based pricing me ...
Saturday, 31 December 11
GLOBALCOAL NEWC INDEX SURGED 2.32 PERCENT
COALspot.com - globalCOAL index in Newcastle Port, benchmark for Asian market, ended substantially higher, surged 2.32 percent to US$115.47 per ...
Saturday, 31 December 11
BORNEO LUMBUNG TO BUY BUMI STAKE, SWAP CEO - THE JAKARTA GLOBE
The Jakarta Globe, one of the leading english news paper in Indonesia reported yesterday, shareholders of Indonesian coking coal miner Borneo Lumbun ...
Friday, 30 December 11
CENTRAL GOVERNMENT SHOULD ISSUE PERMITS - THE JAKARTA POST
The Jakarta Post reported that, business associations from both the palm oil and mining sectors have suggested that the central government should re ...
Thursday, 29 December 11
NEW VESSELS DELIVERED ARE FLOODING THE OCEANS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As expected 2011 has been the year that newbuilding deliveries peaked and kept "flooding" the market, thus supressing freight rates and er ...
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- Salva Resources Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- New Zealand Coal & Carbon
- Antam Resourcindo - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kobexindo Tractors - Indoneisa
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Generating Authority of Thailand
- The State Trading Corporation of India Ltd
- Cigading International Bulk Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Kaltim Prima Coal - Indonesia
- Sakthi Sugars Limited - India
- Global Business Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kartika Selabumi Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- Jindal Steel & Power Ltd - India
- Mjunction Services Limited - India
- Rashtriya Ispat Nigam Limited - India
- India Bulls Power Limited - India
- PowerSource Philippines DevCo
- Interocean Group of Companies - India
- Bahari Cakrawala Sebuku - Indonesia
- Xindia Steels Limited - India
- Merrill Lynch Commodities Europe
- Lanco Infratech Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- Minerals Council of Australia
- Semirara Mining and Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- Trasteel International SA, Italy
- Independent Power Producers Association of India
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- IEA Clean Coal Centre - UK
- Essar Steel Hazira Ltd - India
- Therma Luzon, Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- Larsen & Toubro Limited - India
- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Central Java Power - Indonesia
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- Banpu Public Company Limited - Thailand
- Indonesian Coal Mining Association
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- Tata Chemicals Ltd - India
- Parliament of New Zealand
- ICICI Bank Limited - India
- Bangladesh Power Developement Board
- IHS Mccloskey Coal Group - USA
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- Mintek Dendrill Indonesia
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- Posco Energy - South Korea
- Kapuas Tunggal Persada - Indonesia
- Wilmar Investment Holdings
- Semirara Mining Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- SMG Consultants - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- Intertek Mineral Services - Indonesia
- Chamber of Mines of South Africa
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Savvy Resources Ltd - HongKong
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- Timah Investasi Mineral - Indoneisa
- PTC India Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Dalmia Cement Bharat India
- London Commodity Brokers - England
- Mercator Lines Limited - India
- Directorate Of Revenue Intelligence - India
- Grasim Industreis Ltd - India
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Orica Mining Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coalindo Energy - Indonesia
- Makarim & Taira - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Indian Energy Exchange, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Economic Council, Georgia
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- The Treasury - Australian Government
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Sojitz Corporation - Japan
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- ASAPP Information Group - India
- The University of Queensland
- GVK Power & Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Thai Mozambique Logistica
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- Bharathi Cement Corporation - India
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Kumho Petrochemical, South Korea
- LBH Netherlands Bv - Netherlands
- San Jose City I Power Corp, Philippines
- SMC Global Power, Philippines
- Malabar Cements Ltd - India
- Central Electricity Authority - India
- Kalimantan Lumbung Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Leighton Contractors Pty Ltd - Australia
- Indian Oil Corporation Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- Aboitiz Power Corporation - Philippines
- Latin American Coal - Colombia
- GMR Energy Limited - India
- Thiess Contractors Indonesia
- Bukit Baiduri Energy - Indonesia
- Energy Development Corp, Philippines
- Power Finance Corporation Ltd., India
- Energy Link Ltd, New Zealand
- VISA Power Limited - India
- Vedanta Resources Plc - India
- Bukit Asam (Persero) Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Bhatia International Limited - India
- CNBM International Corporation - China
- GAC Shipping (India) Pvt Ltd
- Uttam Galva Steels Limited - India
- Siam City Cement PLC, Thailand
- Gujarat Sidhee Cement - India
- Star Paper Mills Limited - India
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Karbindo Abesyapradhi - Indoneisa
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- Planning Commission, India
- Sinarmas Energy and Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- TeaM Sual Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- Borneo Indobara - Indonesia
- Bhushan Steel Limited - India
- Barasentosa Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Standard Chartered Bank - UAE
- Orica Australia Pty. Ltd.
- Singapore Mercantile Exchange
- Gujarat Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Port Waratah Coal Services - Australia
- Kepco SPC Power Corporation, Philippines
- Georgia Ports Authority, United States
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Sarangani Energy Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Marubeni Corporation - India
- Madhucon Powers Ltd - India
- Deloitte Consulting - India
- Goldman Sachs - Singapore
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