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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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Thursday, 07 November 13
THE ENERGY INDUSTRY'S RISING WATER CHALLENGE - WOOD MACKENZIE
Water poses a variety of business risks for the energy industry, and could play an influential role in shaping the future energy supply mix, accordi ...
Thursday, 07 November 13
HANDY : INDO/CHINA ROUNDS ARE SEEING BIDS AT AROUND $16K
Handy
In the Atlantic we have seen more activity this week with several fixtures being concluded at firm rates. USG/Feast been reported at 30k and ...
Wednesday, 06 November 13
THE BIGGER SIZE SEGMENTS LOST GROUND WHILE SUPRAS AND HANDIES HELD ON TO THEIR GAINS - INTERMODAL
Chartering (Wet: Stable+ / Dry: Stable- )
A mirror image of the week prior for the Dry Bulk market, as once more the bigger size segments los ...
Wednesday, 06 November 13
WILL NEW ORDERS DRIVE THE MARKET DOWN AGAIN ONCE DELIVERIES COMMENCE
"While there are many concerns on whether the new orders will drive the market down again once deliveries commence, the second half of 2013 has ...
Tuesday, 05 November 13
AUSTRALIA'S NEWCASTLE PORT SEES DROP IN COAL EXPORTS W-W
COALspot.com: In the week ended November 4, Power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totaled 2.77 m ...
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- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- Baramulti Group, Indonesia
- Vedanta Resources Plc - India
- Bhushan Steel Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- White Energy Company Limited
- Kohat Cement Company Ltd. - Pakistan
- New Zealand Coal & Carbon
- Tamil Nadu electricity Board
- Central Java Power - Indonesia
- GAC Shipping (India) Pvt Ltd
- International Coal Ventures Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- Cigading International Bulk Terminal - Indonesia
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Attock Cement Pakistan Limited
- Timah Investasi Mineral - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Barasentosa Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Singapore Mercantile Exchange
- Bhatia International Limited - India
- Romanian Commodities Exchange
- Alfred C Toepfer International GmbH - Germany
- Manunggal Multi Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- Indogreen Group - Indonesia
- Standard Chartered Bank - UAE
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Australian Commodity Traders Exchange
- Wilmar Investment Holdings
- Planning Commission, India
- Sinarmas Energy and Mining - Indonesia
- ASAPP Information Group - India
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Georgia Ports Authority, United States
- Kumho Petrochemical, South Korea
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Indonesian Coal Mining Association
- Miang Besar Coal Terminal - Indonesia
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Aboitiz Power Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- PTC India Limited - India
- CNBM International Corporation - China
- Orica Australia Pty. Ltd.
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- Wood Mackenzie - Singapore
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Agrawal Coal Company - India
- Marubeni Corporation - India
- Goldman Sachs - Singapore
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Karaikal Port Pvt Ltd - India
- Siam City Cement PLC, Thailand
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- London Commodity Brokers - England
- Maheswari Brothers Coal Limited - India
- The State Trading Corporation of India Ltd
- Riau Bara Harum - Indonesia
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- Makarim & Taira - Indonesia
- Minerals Council of Australia
- Banpu Public Company Limited - Thailand
- Economic Council, Georgia
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Heidelberg Cement - Germany
- Lanco Infratech Ltd - India
- Indian Energy Exchange, India
- The University of Queensland
- TeaM Sual Corporation - Philippines
- Meralco Power Generation, Philippines
- Coal and Oil Company - UAE
- Australian Coal Association
- Eastern Energy - Thailand
- AsiaOL BioFuels Corp., Philippines
- Medco Energi Mining Internasional
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
- MS Steel International - UAE
- Sakthi Sugars Limited - India
- Grasim Industreis Ltd - India
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Coastal Gujarat Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Sojitz Corporation - Japan
- Larsen & Toubro Limited - India
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- Global Green Power PLC Corporation, Philippines
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bhoruka Overseas - Indonesia
- Mjunction Services Limited - India
- Coalindo Energy - Indonesia
- Independent Power Producers Association of India
- SMG Consultants - Indonesia
- Binh Thuan Hamico - Vietnam
- GVK Power & Infra Limited - India
- Cement Manufacturers Association - India
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- Petron Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- Mercator Lines Limited - India
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Bangladesh Power Developement Board
- South Luzon Thermal Energy Corporation
- Holcim Trading Pte Ltd - Singapore
- Power Finance Corporation Ltd., India
- Aditya Birla Group - India
- Kartika Selabumi Mining - Indonesia
- Oldendorff Carriers - Singapore
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Electricity Generating Authority of Thailand
- Carbofer General Trading SA - India
- Rio Tinto Coal - Australia
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Ind-Barath Power Infra Limited - India
- Edison Trading Spa - Italy
- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- Chamber of Mines of South Africa
- Videocon Industries ltd - India
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sical Logistics Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Indian Oil Corporation Limited
- Global Business Power Corporation, Philippines
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Parliament of New Zealand
- Thai Mozambique Logistica
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- Star Paper Mills Limited - India
- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
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