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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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Saturday, 24 December 11
CHINAS LEVEL OF GROWTH TO DETERMINE COURSE OF DRY BULK MARKET IN 2012 SAYS SHIPBROKER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest report, shipbroker Intermodal attempted to find a silver lining in the tough year that was 2011, as well as what one could expect from ...
Friday, 23 December 11
SPOT PACIFIC CAPESIZE VESSELS HAVE COMMANDED HIGH PREMIUMS - FEARNLEYS
Handy
Rates in the Atlantic kept stable from last week, with a touch of negativity closer to the end. Less spot cargoes seen, and owners are ...
Friday, 23 December 11
CONTENTIOUS ISSUES IN CONTRACT RENEGOTIATION - THE JAKARTA POST
The government has been renegotiating mining contracts, especially those 30-40 years old, with almost all mining companies, including PT Freeport In ...
Friday, 23 December 11
LANCO JOINS HANDS WITH BUKIT ASAM FOR INDONESIAN POWER PROJECT
COALspot.com - PT Tambang Batubara Bukit Asam, Indonesia's state owned coal miner and Indian based Lanco Infratech Ltd plans to build steam power p ...
Thursday, 22 December 11
RI WILL NOT PLAY CATCH-UP WITH GLOBAL COAL DEMAND - THE JAKARTA POST
The Jakarta Post reported that, the International Energy Agency (IEA) has predicted in its Coal Market Report 2011 that over the next five years, gl ...
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- Jaiprakash Power Ventures ltd
- Uttam Galva Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Ministry of Finance - Indonesia
- San Jose City I Power Corp, Philippines
- Karaikal Port Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement PLC, Thailand
- Kepco SPC Power Corporation, Philippines
- Eastern Energy - Thailand
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- Romanian Commodities Exchange
- Oldendorff Carriers - Singapore
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- McConnell Dowell - Australia
- Renaissance Capital - South Africa
- London Commodity Brokers - England
- Rashtriya Ispat Nigam Limited - India
- Goldman Sachs - Singapore
- Altura Mining Limited, Indonesia
- Mjunction Services Limited - India
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- Coalindo Energy - Indonesia
- Indogreen Group - Indonesia
- Directorate Of Revenue Intelligence - India
- Interocean Group of Companies - India
- Eastern Coal Council - USA
- Thiess Contractors Indonesia
- The Treasury - Australian Government
- Anglo American - United Kingdom
- Central Electricity Authority - India
- Ambuja Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- MS Steel International - UAE
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Electricity Authority, New Zealand
- VISA Power Limited - India
- Indian Energy Exchange, India
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- Mercuria Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- IEA Clean Coal Centre - UK
- Mintek Dendrill Indonesia
- White Energy Company Limited
- Xindia Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhushan Steel Limited - India
- Trasteel International SA, Italy
- Straits Asia Resources Limited - Singapore
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- Orica Mining Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Singapore Mercantile Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- Chettinad Cement Corporation Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Energy Development Corp, Philippines
- Borneo Indobara - Indonesia
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- Alfred C Toepfer International GmbH - Germany
- SMG Consultants - Indonesia
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- Meralco Power Generation, Philippines
- Indian Oil Corporation Limited
- Tamil Nadu electricity Board
- Petron Corporation, Philippines
- ASAPP Information Group - India
- Bhoruka Overseas - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Edison Trading Spa - Italy
- Malabar Cements Ltd - India
- Australian Coal Association
- Therma Luzon, Inc, Philippines
- CIMB Investment Bank - Malaysia
- Electricity Generating Authority of Thailand
- Sical Logistics Limited - India
- Latin American Coal - Colombia
- South Luzon Thermal Energy Corporation
- India Bulls Power Limited - India
- Essar Steel Hazira Ltd - India
- Dalmia Cement Bharat India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Meenaskhi Energy Private Limited - India
- Jindal Steel & Power Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Minerals Council of Australia
- PTC India Limited - India
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- New Zealand Coal & Carbon
- Formosa Plastics Group - Taiwan
- Miang Besar Coal Terminal - Indonesia
- Cement Manufacturers Association - India
- Asmin Koalindo Tuhup - Indonesia
- Wilmar Investment Holdings
- Maheswari Brothers Coal Limited - India
- Kapuas Tunggal Persada - Indonesia
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- Makarim & Taira - Indonesia
- Kobexindo Tractors - Indoneisa
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Bayan Resources Tbk. - Indonesia
- Baramulti Group, Indonesia
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Parliament of New Zealand
- Thai Mozambique Logistica
- Kideco Jaya Agung - Indonesia
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- ICICI Bank Limited - India
- Indonesian Coal Mining Association
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- CNBM International Corporation - China
- Petrochimia International Co. Ltd.- Taiwan
- Savvy Resources Ltd - HongKong
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Price Waterhouse Coopers - Russia
- Standard Chartered Bank - UAE
- Madhucon Powers Ltd - India
- Tata Chemicals Ltd - India
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mercator Lines Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bangladesh Power Developement Board
- GAC Shipping (India) Pvt Ltd
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