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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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Tuesday, 29 October 13
NEWCASTLE PORT SHIPPED 12.29 PER CENT MORE COAL W-W
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 12.29 per cent week on week to 3.61 million mt for ...
Monday, 28 October 13
API 8 CFR SOUTH CHINA COAL FOR Q3'14 DELIVERY LOST ON D-D,W-W & M-M
COALspot.com : API 8 CFR South China Coal swaps for average Q4 2013 delivery fell 0.22 percept M-M on Friday 25 October 2013. The CFR South China Co ...
Monday, 28 October 13
COAL SWAP FOR Q3' 2014 DELIVERY LOST ON D-D, W-W AND M-M
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery gained 0.46 percept month on month on Friday 25 October 2 ...
Saturday, 26 October 13
PANAMAX CHARTER RATES FROM INDONESIA TO INDIA STAY FIRM - SOLYM
COALspot.com: The freight market showed tendency of softness with Cape and Panamax futures and physical soft.
The BDI was down by 12 pct week end ...
Saturday, 26 October 13
DRY BULK MARKET KEEPS ON RETREATING, BUT NEW BUILDING ORDERS KEEP ON PILING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market kept on retreating this week, with the industry's benchmark, the Baltic Dry Index (BDI) falling to 1,708 points, down 78 on the ...
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- Sakthi Sugars Limited - India
- White Energy Company Limited
- Kapuas Tunggal Persada - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Timah Investasi Mineral - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Commonwealth Bank - Australia
- Pendopo Energi Batubara - Indonesia
- Latin American Coal - Colombia
- Bukit Makmur.PT - Indonesia
- Central Electricity Authority - India
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- Kobexindo Tractors - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- Banpu Public Company Limited - Thailand
- Planning Commission, India
- PowerSource Philippines DevCo
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- Romanian Commodities Exchange
- Mercuria Energy - Indonesia
- The University of Queensland
- Goldman Sachs - Singapore
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- Petron Corporation, Philippines
- Indogreen Group - Indonesia
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- Siam City Cement PLC, Thailand
- Bulk Trading Sa - Switzerland
- Maharashtra Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- New Zealand Coal & Carbon
- Central Java Power - Indonesia
- Parry Sugars Refinery, India
- Manunggal Multi Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Malabar Cements Ltd - India
- Merrill Lynch Commodities Europe
- Coastal Gujarat Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Attock Cement Pakistan Limited
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- Videocon Industries ltd - India
- PTC India Limited - India
- Larsen & Toubro Limited - India
- Star Paper Mills Limited - India
- Xindia Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Edison Trading Spa - Italy
- Sindya Power Generating Company Private Ltd
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
- Antam Resourcindo - Indonesia
- VISA Power Limited - India
- Ind-Barath Power Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- Wilmar Investment Holdings
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- PetroVietnam Power Coal Import and Supply Company
- Power Finance Corporation Ltd., India
- Deloitte Consulting - India
- Sree Jayajothi Cements Limited - India
- Borneo Indobara - Indonesia
- Vedanta Resources Plc - India
- Global Coal Blending Company Limited - Australia
- Kalimantan Lumbung Energi - Indonesia
- Dalmia Cement Bharat India
- Parliament of New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- San Jose City I Power Corp, Philippines
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Cement Manufacturers Association - India
- Global Green Power PLC Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Australian Commodity Traders Exchange
- Anglo American - United Kingdom
- Sical Logistics Limited - India
- Barasentosa Lestari - Indonesia
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- International Coal Ventures Pvt Ltd - India
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- Indika Energy - Indonesia
- Uttam Galva Steels Limited - India
- Independent Power Producers Association of India
- Africa Commodities Group - South Africa
- Krishnapatnam Port Company Ltd. - India
- Kepco SPC Power Corporation, Philippines
- CNBM International Corporation - China
- Chettinad Cement Corporation Ltd - India
- Jaiprakash Power Ventures ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- Standard Chartered Bank - UAE
- Siam City Cement - Thailand
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Trasteel International SA, Italy
- Bukit Baiduri Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Wood Mackenzie - Singapore
- Riau Bara Harum - Indonesia
- McConnell Dowell - Australia
- Indian Energy Exchange, India
- SN Aboitiz Power Inc, Philippines
- Indian Oil Corporation Limited
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- Ministry of Transport, Egypt
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
- Bangladesh Power Developement Board
- Oldendorff Carriers - Singapore
- Tata Chemicals Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- Medco Energi Mining Internasional
- Straits Asia Resources Limited - Singapore
- PNOC Exploration Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Interocean Group of Companies - India
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- IEA Clean Coal Centre - UK
- Madhucon Powers Ltd - India
- Therma Luzon, Inc, Philippines
- Thiess Contractors Indonesia
- Savvy Resources Ltd - HongKong
- European Bulk Services B.V. - Netherlands
- SMG Consultants - Indonesia
- Leighton Contractors Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Agrawal Coal Company - India
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Simpson Spence & Young - Indonesia
- Sarangani Energy Corporation, Philippines
- Indonesian Coal Mining Association
- Maheswari Brothers Coal Limited - India
- Kideco Jaya Agung - Indonesia
- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Bahari Cakrawala Sebuku - Indonesia
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- LBH Netherlands Bv - Netherlands
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