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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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Monday, 12 December 11
DRY BULK MARKET LOOKING FOR BALANCE AS WE ENTER 2012 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
During the past few months, freight rates for dry bulk carriers, especially Capesizes have increased significantly, providing ship owners with a muc ...
Sunday, 11 December 11
THE PANAMAX INDEX ENDED ON POSITIVE DIRECTION - VISTAAR
COALspot.com - The BDI and Cape index continued the upward trend this week also with BDI up by 3.00 pct closing at 1,922 points and Cape index up by ...
Saturday, 10 December 11
MAHAKAM RIVER RESUMES COAL TRANSPORTATION
COALspot.com - East Kalimantan local government has resumed limited coal barging through Mahakam River after two weeks of suspension following the c ...
Friday, 09 December 11
DRY BULK MARKET REBOUNDS ON HEALTHIER DEMAND OUTLOOK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market edged forward yesterday, at the highest rate of the past couple of weeks, as a result of stonger iron ore demand, backed by lowe ...
Thursday, 08 December 11
INDIA MAY SEE 41% ANNUAL GROWTH OF ITS COAL DEMAND DURING THE NEXT 5 YEARS - ICAP SHIPPING
India’s Ministry of Coal expects that India’s coal demand may face an annual 41% rise during the next 5 years, while its coal deficit is ...
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- VISA Power Limited - India
- Mercator Lines Limited - India
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- Bharathi Cement Corporation - India
- Salva Resources Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Posco Energy - South Korea
- The University of Queensland
- Kohat Cement Company Ltd. - Pakistan
- Krishnapatnam Port Company Ltd. - India
- San Jose City I Power Corp, Philippines
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Minerals Council of Australia
- Orica Mining Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Eastern Coal Council - USA
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- GMR Energy Limited - India
- Toyota Tsusho Corporation, Japan
- Coastal Gujarat Power Limited - India
- Power Finance Corporation Ltd., India
- Savvy Resources Ltd - HongKong
- Jorong Barutama Greston.PT - Indonesia
- Therma Luzon, Inc, Philippines
- TeaM Sual Corporation - Philippines
- Bhatia International Limited - India
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- Petron Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- Energy Link Ltd, New Zealand
- PowerSource Philippines DevCo
- Sindya Power Generating Company Private Ltd
- Globalindo Alam Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Mercuria Energy - Indonesia
- Vizag Seaport Private Limited - India
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- Videocon Industries ltd - India
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Port Waratah Coal Services - Australia
- Africa Commodities Group - South Africa
- ASAPP Information Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meenaskhi Energy Private Limited - India
- SMG Consultants - Indonesia
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- Parliament of New Zealand
- Trasteel International SA, Italy
- Global Business Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Wood Mackenzie - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- Independent Power Producers Association of India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Georgia Ports Authority, United States
- Singapore Mercantile Exchange
- Kobexindo Tractors - Indoneisa
- Electricity Authority, New Zealand
- Latin American Coal - Colombia
- Indian Energy Exchange, India
- Electricity Generating Authority of Thailand
- GVK Power & Infra Limited - India
- McConnell Dowell - Australia
- Marubeni Corporation - India
- Jaiprakash Power Ventures ltd
- Sical Logistics Limited - India
- Deloitte Consulting - India
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- South Luzon Thermal Energy Corporation
- Eastern Energy - Thailand
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- Mintek Dendrill Indonesia
- Vedanta Resources Plc - India
- Straits Asia Resources Limited - Singapore
- Billiton Holdings Pty Ltd - Australia
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Tata Chemicals Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Price Waterhouse Coopers - Russia
- Asmin Koalindo Tuhup - Indonesia
- Antam Resourcindo - Indonesia
- Kaltim Prima Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement - Thailand
- Bayan Resources Tbk. - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Thai Mozambique Logistica
- Sarangani Energy Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- The Treasury - Australian Government
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- New Zealand Coal & Carbon
- GAC Shipping (India) Pvt Ltd
- Makarim & Taira - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- Binh Thuan Hamico - Vietnam
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Bhushan Steel Limited - India
- Rio Tinto Coal - Australia
- Indogreen Group - Indonesia
- PTC India Limited - India
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- Indika Energy - Indonesia
- Coalindo Energy - Indonesia
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- Central Electricity Authority - India
- Agrawal Coal Company - India
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- Cement Manufacturers Association - India
- SN Aboitiz Power Inc, Philippines
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The State Trading Corporation of India Ltd
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- Siam City Cement PLC, Thailand
- Bhoruka Overseas - Indonesia
- Bukit Makmur.PT - Indonesia
- Indian Oil Corporation Limited
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- Oldendorff Carriers - Singapore
- Manunggal Multi Energi - Indonesia
- Dalmia Cement Bharat India
- Kideco Jaya Agung - Indonesia
- Bulk Trading Sa - Switzerland
- Gujarat Sidhee Cement - India
- Iligan Light & Power Inc, Philippines
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Aditya Birla Group - India
- Larsen & Toubro Limited - India
- Parry Sugars Refinery, India
- Ministry of Mines - Canada
- Karbindo Abesyapradhi - Indoneisa
- India Bulls Power Limited - India
- IEA Clean Coal Centre - UK
- Medco Energi Mining Internasional
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- Semirara Mining and Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Holcim Trading Pte Ltd - Singapore
- Australian Commodity Traders Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
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