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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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Thursday, 01 December 11
DRY BULK MARKET RISES TO NEW HEIGHTS ON RENEWED DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept on rising this week, with the industry’s benchmark, the Baltic Dry Index (BDI) climbing to 1,846 points on Wednes ...
Tuesday, 29 November 11
SOUTH AFRICAN COAL INTO CHINA, THE ACTIVITY WAS SLOW - BRS
Capesize
The Capesize market in Atlantic stayed pretty firm last week with transatlantic rounds being fixed in the high twenties. Sentiment was les ...
Tuesday, 29 November 11
GOLDEN GATE BRIDGE OF INDONESIA COLLAPSED AT KUKAR, EAST KALIMANTAN
COALspot.com - A suspension bridge in Indonesia’s east Kalimantan province over the Mahakam river collapsed on Saturday, killing at least elev ...
Tuesday, 29 November 11
BUKIT ASAM SCOUTS RP3 TRILLION PROFIT - INSIDER STORIES
The state-controlled coal miner PT Bukit Asam Tbk (PTBA) expects to post a Rp3 trillion net income this year, reaching its target which is 50% above ...
Tuesday, 29 November 11
DRY BULK MARKET BEGINS WEEK ON HIGHER NOTE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Contrary to what had been the case during the past few weeks, this one began on a high note for the dry bulk market, with the Capesize sector pullin ...
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- Krishnapatnam Port Company Ltd. - India
- PNOC Exploration Corporation - Philippines
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Georgia Ports Authority, United States
- CNBM International Corporation - China
- Romanian Commodities Exchange
- Borneo Indobara - Indonesia
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Africa Commodities Group - South Africa
- Thiess Contractors Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- McConnell Dowell - Australia
- Alfred C Toepfer International GmbH - Germany
- Goldman Sachs - Singapore
- Tata Chemicals Ltd - India
- Mintek Dendrill Indonesia
- Petron Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Kapuas Tunggal Persada - Indonesia
- Straits Asia Resources Limited - Singapore
- OPG Power Generation Pvt Ltd - India
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Commonwealth Bank - Australia
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- White Energy Company Limited
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- Videocon Industries ltd - India
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- New Zealand Coal & Carbon
- IEA Clean Coal Centre - UK
- Billiton Holdings Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- Sical Logistics Limited - India
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- The Treasury - Australian Government
- Price Waterhouse Coopers - Russia
- Interocean Group of Companies - India
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- Uttam Galva Steels Limited - India
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- Kepco SPC Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- Bahari Cakrawala Sebuku - Indonesia
- Sree Jayajothi Cements Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- ASAPP Information Group - India
- Oldendorff Carriers - Singapore
- Therma Luzon, Inc, Philippines
- Dalmia Cement Bharat India
- Edison Trading Spa - Italy
- Indogreen Group - Indonesia
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Orica Australia Pty. Ltd.
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- European Bulk Services B.V. - Netherlands
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- Grasim Industreis Ltd - India
- Renaissance Capital - South Africa
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Essar Steel Hazira Ltd - India
- SN Aboitiz Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- SMC Global Power, Philippines
- TeaM Sual Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- PTC India Limited - India
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Attock Cement Pakistan Limited
- Toyota Tsusho Corporation, Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- Formosa Plastics Group - Taiwan
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Antam Resourcindo - Indonesia
- Savvy Resources Ltd - HongKong
- Bangladesh Power Developement Board
- Energy Development Corp, Philippines
- Gujarat Sidhee Cement - India
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- Miang Besar Coal Terminal - Indonesia
- Standard Chartered Bank - UAE
- Ministry of Transport, Egypt
- Minerals Council of Australia
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- Kobexindo Tractors - Indoneisa
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- Semirara Mining and Power Corporation, Philippines
- PowerSource Philippines DevCo
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Sakthi Sugars Limited - India
- Planning Commission, India
- GMR Energy Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ceylon Electricity Board - Sri Lanka
- Xindia Steels Limited - India
- Jindal Steel & Power Ltd - India
- Eastern Energy - Thailand
- Economic Council, Georgia
- Baramulti Group, Indonesia
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Bhoruka Overseas - Indonesia
- Central Electricity Authority - India
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Independent Power Producers Association of India
- London Commodity Brokers - England
- Indonesian Coal Mining Association
- Central Java Power - Indonesia
- Mjunction Services Limited - India
- Tamil Nadu electricity Board
- Electricity Generating Authority of Thailand
- Eastern Coal Council - USA
- Jorong Barutama Greston.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Australian Coal Association
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- GAC Shipping (India) Pvt Ltd
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
- Energy Link Ltd, New Zealand
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