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Tuesday, 01 October 13
DRY BULK MARKET POISED FOR RETREAT ON CHINA HOLIDAY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The start of a national weeklong in China as of Tuesday is expected to put a lid in the latest rally of the dry bulk freight market, as has always been the case in similar occasions. This trend has already been obvious, by tracking the latest couple of sessions of the industry's benchmark, the Baltic Dry Index. The BDI was down 43 points yesterday, to end at 2,003 points, still more than double than the level of this past summer. The Capesize market witnessed the widest losses, which again was to be expected, given that most of the Capesize business is coming out of China. The BCI (Baltic Capesize Index) was down by 114 points to 3,853. Marginal losses were again obvious in the Panamax market, while smaller ship classes fared better, with Supramaxes rising by 10 points and Handysizes by three points to 1,079 and 597 respectively.
Capt. Jitesh Jaipuriyar, Chief Operating officer with Emerald Maritime, Dubai, offered Hellenic Shipping News Worldwide (www.hellenicshippingnews.com) an insight, regarding this latest rally of the dry bulk market, which has been fuelled by factors both "upstream" and "downstream". In the upstream factors, Capt. Jaipuriyar, noted that "miners are not able to sell at higher costs as there are few “takers”. India and China, as one of the most prospective import economies, are unable to support high raw material prices due to currency devaluation and slow growth combined. However, a miner may not be able to feed supply at the same cost for long as it threatens the very survival. Thus, the importer is forced to pay for high raw material prices which eventually is directly correlated to BDI upswing and supports the rally", he stated.
Regarding downstream factors, Capt. said that "in the current scenario, any increase in prices of raw materials, shall force miners to pass on the rises to the end users, in order to maintain profit margins, especially if this trend continues for an extended period. For shipping to recover, then this period has to be extended. Does it mean that it would bring “Inflationary pressure” in emerging economies? Not necessary. This is because when pressure builds up on downstream, other “balancing factors” shall come into play" he says.
According to Capt. Jaipuriyar, at this stage "the following question arises, if the high raw materials cost shall be able to create a “derived demand” or not. What we see as of now may not be real derived demand but more of a “Pseudo Demand”. Pseudo demand emerges from the constraint of choices a company has when having contracted out spot rates. This will show increased demand through paying more for shipping of the materials. However, the fact remains that companies have to commit to long term contracts (LTCs) and soaring period rates would not allow them to contract ships at lesser Time-Charter equivalents. But LTCs can play ‘Wait and watch’ game. This again contributes to pool of “pseudo demand” to be capitalized later and would support the rally", he says.
BULLWHIP EFFECT & “DECOUPLING”
"Last month, A Capesize stem from Australia to China, cost USD 14 per MT whereas same when slit in two panamaxes, costs only USD 13 per MT. This is against the economy of scale. So, how does it happen? When the demand goes up, a producer goes for bigger volumes and Capes rate go high. Due to limited Capes, the demand for smaller sizes down the chain increases which in effect creates a ‘Bullwhip effect’ to drive the demand for ships and rallies BDI overall.
So, at some point of time, the economic principles “decouple” with existing demand and supply scenario and lead to speculations. This in turn brings in volatility in the market. But the end demand drives it in sustainable way in spite of creation of multiple peaks and troughs on the way.
ROAD AHEAD
There have been many attempts to forecast BDIs in past and will continued to be explored. However, interestingly, it appears that the accuracy of forecasts lies not in “correlation” but possible “negative correlations”. It is for the fact that a positive correlation is not mere a result of one factor but a combination of many. Under such circumstances, it may not be possible to substantiate a proper or perfect “weightage” to one factor or another. But, past shows that gold, CRB (Commodity research bureau index) and crude prices often indicate how the negative correlation is building up and may help forecast BDI for short runs, possibly.
Overall, market remains upbeat for positive growth as stockpiles of grains and coal and other major commodities remain high to be shipped across the geographies", he concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Friday, 15 November 13
US COAL PRODUCTION UP 2.59% WEEK ON WEEK
COALspot.com – United States the world’s second largest coal producer, produced approximately 19.8 million short tons (mmst) of coal in ...
Friday, 15 November 13
TAIWAN'S PLASTICS GROUP FORMOSA TO IMPORT 1.37 MILLION TONS OF COAL FOR Q1' 14
COALspot.com: Taiwan's Formosa Plastics Group is inviting bids for total 1.37 million mt of coal for 1Q’ 14 for its various plants in Taiwan, ...
Thursday, 14 November 13
KOMIPO TO BUY 270K MT OF SUB-BITUMINOUS COAL FOR Q2' 14
COALspot.com : Korea Midland Power Co., Ltd. has invited bids through International Open Bidding for 140,000 Metric Tons (MT) of sub-bituminous coal ...
Thursday, 14 November 13
PANAMAX : MARKET SHOULD BE AROUND USD 11500 FOR 1 YEAR - FEARNLEYS AS
Handy
The Atlantic market has picked up this week with prompt ships able USG for November dates coming off and chrts need to pay up in order to cov ...
Wednesday, 13 November 13
Y'14 SUB-BIT INDO COAL SWAP MOVING AT SNAIL-SPEED
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q1’2014 delivery gained 2.95 percept month on month on Friday ...
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- Ministry of Finance - Indonesia
- Timah Investasi Mineral - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Anglo American - United Kingdom
- Australian Commodity Traders Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Mining Services - Indonesia
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- Africa Commodities Group - South Africa
- Coal and Oil Company - UAE
- McConnell Dowell - Australia
- Eastern Coal Council - USA
- Bahari Cakrawala Sebuku - Indonesia
- Mintek Dendrill Indonesia
- London Commodity Brokers - England
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- Carbofer General Trading SA - India
- Larsen & Toubro Limited - India
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- Grasim Industreis Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- Kapuas Tunggal Persada - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- SMC Global Power, Philippines
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining Corp, Philippines
- Kumho Petrochemical, South Korea
- The State Trading Corporation of India Ltd
- Ministry of Transport, Egypt
- Mercuria Energy - Indonesia
- Bulk Trading Sa - Switzerland
- The University of Queensland
- Ambuja Cements Ltd - India
- San Jose City I Power Corp, Philippines
- GMR Energy Limited - India
- PNOC Exploration Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Manunggal Multi Energi - Indonesia
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- Samtan Co., Ltd - South Korea
- Star Paper Mills Limited - India
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Bhatia International Limited - India
- Merrill Lynch Commodities Europe
- Sinarmas Energy and Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- SMG Consultants - Indonesia
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Commonwealth Bank - Australia
- Kepco SPC Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Bhoruka Overseas - Indonesia
- Attock Cement Pakistan Limited
- Savvy Resources Ltd - HongKong
- Australian Coal Association
- Leighton Contractors Pty Ltd - Australia
- Electricity Authority, New Zealand
- Meralco Power Generation, Philippines
- Mjunction Services Limited - India
- IEA Clean Coal Centre - UK
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Energy Link Ltd, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- Antam Resourcindo - Indonesia
- Bharathi Cement Corporation - India
- Deloitte Consulting - India
- Minerals Council of Australia
- VISA Power Limited - India
- Posco Energy - South Korea
- Oldendorff Carriers - Singapore
- Thai Mozambique Logistica
- Indonesian Coal Mining Association
- Indian Energy Exchange, India
- Ceylon Electricity Board - Sri Lanka
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PTC India Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- Globalindo Alam Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Indika Energy - Indonesia
- Videocon Industries ltd - India
- Central Electricity Authority - India
- Agrawal Coal Company - India
- Indian Oil Corporation Limited
- ICICI Bank Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Energy Development Corp, Philippines
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Parliament of New Zealand
- New Zealand Coal & Carbon
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Pipit Mutiara Jaya. PT, Indonesia
- Jaiprakash Power Ventures ltd
- Aboitiz Power Corporation - Philippines
- Xindia Steels Limited - India
- Madhucon Powers Ltd - India
- Heidelberg Cement - Germany
- Singapore Mercantile Exchange
- Edison Trading Spa - Italy
- White Energy Company Limited
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- Medco Energi Mining Internasional
- Interocean Group of Companies - India
- Coalindo Energy - Indonesia
- Bangladesh Power Developement Board
- Cigading International Bulk Terminal - Indonesia
- Sical Logistics Limited - India
- Wood Mackenzie - Singapore
- Bukit Makmur.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Altura Mining Limited, Indonesia
- Price Waterhouse Coopers - Russia
- Global Green Power PLC Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- MS Steel International - UAE
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- Global Business Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- Standard Chartered Bank - UAE
- PowerSource Philippines DevCo
- Sakthi Sugars Limited - India
- Goldman Sachs - Singapore
- Pendopo Energi Batubara - Indonesia
- Siam City Cement - Thailand
- Karaikal Port Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Power Finance Corporation Ltd., India
- Billiton Holdings Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Indogreen Group - Indonesia
- Riau Bara Harum - Indonesia
- Chettinad Cement Corporation Ltd - India
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- Ministry of Mines - Canada
- Toyota Tsusho Corporation, Japan
- Simpson Spence & Young - Indonesia
- Petron Corporation, Philippines
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- Lanco Infratech Ltd - India
- Kartika Selabumi Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- Marubeni Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Miang Besar Coal Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- Tata Chemicals Ltd - India
- Renaissance Capital - South Africa
- European Bulk Services B.V. - Netherlands
- Binh Thuan Hamico - Vietnam
- Salva Resources Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- Baramulti Group, Indonesia
- Essar Steel Hazira Ltd - India
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- Sindya Power Generating Company Private Ltd
- CNBM International Corporation - China
- Parry Sugars Refinery, India
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