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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, 05 December 11
SGX LAUNCHED IHS MCCLOSKEY/XINHUA INFOLINK OTC CFR SOUTH CHINA COAL CONTRACT TODAY
COALspot.com - In order to meet the demand of the coal industry for an effective coal hedging tool with counterparty credit risk mitigation facility ...
Monday, 05 December 11
DRY BULK RATES LOOKING TO EXTEND GAINS THIS WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Capesize dry bulk carrier owners have had a great week, with rates rising for six straight sessions (including the end of the week before that). As ...
Sunday, 04 December 11
SUPRAMAX TRIPS VIA INDONESIA WERE REPORTED AROUND $ 7500 - 8000 PD
COALspot.com - The BDI and Cape index recovered this week. The BDI was up by 3.26 pct and Cape index saw a big jump and closed at 3409 points (up by ...
Saturday, 03 December 11
BORNEO TO SPEND US$600 MIO CAPEX - INSIDER STORIES
Insider Stories reported that, Coking coal miner PT Borneo Lumbung Energi & Metal Tbk (BORN) plans to spend US$600 million capital expenditure ( ...
Friday, 02 December 11
DRY BULK CARRIERS BACK IN THE SPOTLIGHT AS MARKET SPEEDS UP - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the tanker and container markets suffering dearly, it seems that the tide has once again turned in favor of the dry bulk carriers, despite over ...
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- Malabar Cements Ltd - India
- Ministry of Transport, Egypt
- Energy Development Corp, Philippines
- Bulk Trading Sa - Switzerland
- Romanian Commodities Exchange
- Sical Logistics Limited - India
- MS Steel International - UAE
- Mercator Lines Limited - India
- Jaiprakash Power Ventures ltd
- Kapuas Tunggal Persada - Indonesia
- Iligan Light & Power Inc, Philippines
- Larsen & Toubro Limited - India
- Marubeni Corporation - India
- London Commodity Brokers - England
- Jorong Barutama Greston.PT - Indonesia
- Aditya Birla Group - India
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Merrill Lynch Commodities Europe
- Ministry of Mines - Canada
- PetroVietnam Power Coal Import and Supply Company
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- SMG Consultants - Indonesia
- Attock Cement Pakistan Limited
- Bukit Baiduri Energy - Indonesia
- Interocean Group of Companies - India
- Australian Commodity Traders Exchange
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- Siam City Cement - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhatia International Limited - India
- Alfred C Toepfer International GmbH - Germany
- Barasentosa Lestari - Indonesia
- Xindia Steels Limited - India
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Goldman Sachs - Singapore
- Maheswari Brothers Coal Limited - India
- Sakthi Sugars Limited - India
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
- CNBM International Corporation - China
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Eastern Energy - Thailand
- OPG Power Generation Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Altura Mining Limited, Indonesia
- Timah Investasi Mineral - Indoneisa
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- South Luzon Thermal Energy Corporation
- Madhucon Powers Ltd - India
- White Energy Company Limited
- Directorate Of Revenue Intelligence - India
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Ministry of Finance - Indonesia
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Manunggal Multi Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- Indika Energy - Indonesia
- SMC Global Power, Philippines
- PNOC Exploration Corporation - Philippines
- PowerSource Philippines DevCo
- GN Power Mariveles Coal Plant, Philippines
- ICICI Bank Limited - India
- Miang Besar Coal Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Australian Coal Association
- Baramulti Group, Indonesia
- Global Coal Blending Company Limited - Australia
- Binh Thuan Hamico - Vietnam
- Price Waterhouse Coopers - Russia
- Asmin Koalindo Tuhup - Indonesia
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Dalmia Cement Bharat India
- Bangladesh Power Developement Board
- Medco Energi Mining Internasional
- Central Java Power - Indonesia
- Makarim & Taira - Indonesia
- Global Green Power PLC Corporation, Philippines
- India Bulls Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- CIMB Investment Bank - Malaysia
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- GAC Shipping (India) Pvt Ltd
- Maharashtra Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
- Sarangani Energy Corporation, Philippines
- The University of Queensland
- Economic Council, Georgia
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- Grasim Industreis Ltd - India
- Parliament of New Zealand
- Indogreen Group - Indonesia
- Coalindo Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- Metalloyd Limited - United Kingdom
- Simpson Spence & Young - Indonesia
- Pendopo Energi Batubara - Indonesia
- Mercuria Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Straits Asia Resources Limited - Singapore
- Petron Corporation, Philippines
- Planning Commission, India
- Deloitte Consulting - India
- ASAPP Information Group - India
- Indian Oil Corporation Limited
- Neyveli Lignite Corporation Ltd, - India
- Lanco Infratech Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Minerals Council of Australia
- Kumho Petrochemical, South Korea
- Carbofer General Trading SA - India
- The State Trading Corporation of India Ltd
- Standard Chartered Bank - UAE
- Mintek Dendrill Indonesia
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Heidelberg Cement - Germany
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- Eastern Coal Council - USA
- GMR Energy Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vedanta Resources Plc - India
- International Coal Ventures Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement PLC, Thailand
- Bayan Resources Tbk. - Indonesia
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Anglo American - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Rio Tinto Coal - Australia
- Sindya Power Generating Company Private Ltd
- IHS Mccloskey Coal Group - USA
- Therma Luzon, Inc, Philippines
- San Jose City I Power Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Thai Mozambique Logistica
- Tamil Nadu electricity Board
- Wood Mackenzie - Singapore
- Kobexindo Tractors - Indoneisa
- Latin American Coal - Colombia
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- Chamber of Mines of South Africa
- Central Electricity Authority - India
- Indonesian Coal Mining Association
- Coal and Oil Company - UAE
- Leighton Contractors Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bhoruka Overseas - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- Indo Tambangraya Megah - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Banpu Public Company Limited - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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