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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, 25 October 13
U.S. YEAR-TO-DATE COAL PRODUCTION REACHED TOTALLED 803.1 MMST
COALspot.com – United States the world’s second largest coal producer produced approximately 19.10 million short tons (mmst) of coal in ...
Thursday, 24 October 13
PANAMAX: RATES SLIP ACROSS BOTH HEMISPHERES
Handy
We were back from holidays but still not much enquiries in the market. Overall future direction is uncertain. Currently, ships passing Singap ...
Thursday, 24 October 13
SHIP PRICES ARE INCREASING ON THE BACK OF IMPROVED MARKET SENTIMENT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept on retreating from its recent highs, ending yesterday at 1,786 points, down 61 points on the day, with Capesizes leadin ...
Wednesday, 23 October 13
DRY BULK MARKET HAS SHOWN SIGNS OF STABILITY - INTERMODAL
Chartering (Wet: Stable+ / Dry: Stable-)
The Dry Bulk market has shown signs of stability this past week, with the sole exception of Capes, rates f ...
Wednesday, 23 October 13
MARKET SENTIMENT IN THE DRY BULK SECTOR REMAINS POSITIVE - YANNIS OLZIERSKY
Market sentiment in the dry bulk sector remains positive despite the latest correction in freight rates for the Capesize sector, which are sliding f ...
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- Malabar Cements Ltd - India
- Posco Energy - South Korea
- Alfred C Toepfer International GmbH - Germany
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- SMC Global Power, Philippines
- Antam Resourcindo - Indonesia
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Aboitiz Power Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Essar Steel Hazira Ltd - India
- European Bulk Services B.V. - Netherlands
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Thiess Contractors Indonesia
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Orica Australia Pty. Ltd.
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indo Tambangraya Megah - Indonesia
- Bhushan Steel Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Star Paper Mills Limited - India
- Krishnapatnam Port Company Ltd. - India
- Cement Manufacturers Association - India
- Simpson Spence & Young - Indonesia
- Oldendorff Carriers - Singapore
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- Straits Asia Resources Limited - Singapore
- Neyveli Lignite Corporation Ltd, - India
- PNOC Exploration Corporation - Philippines
- Georgia Ports Authority, United States
- Kumho Petrochemical, South Korea
- Sarangani Energy Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Electricity Generating Authority of Thailand
- Maharashtra Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Kalimantan Lumbung Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Energy Development Corp, Philippines
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Anglo American - United Kingdom
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- India Bulls Power Limited - India
- Vedanta Resources Plc - India
- Global Business Power Corporation, Philippines
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- Grasim Industreis Ltd - India
- Africa Commodities Group - South Africa
- Chamber of Mines of South Africa
- PetroVietnam Power Coal Import and Supply Company
- Mjunction Services Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Ceylon Electricity Board - Sri Lanka
- Bharathi Cement Corporation - India
- South Luzon Thermal Energy Corporation
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- Manunggal Multi Energi - Indonesia
- GMR Energy Limited - India
- Australian Coal Association
- Economic Council, Georgia
- Tamil Nadu electricity Board
- Miang Besar Coal Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- Attock Cement Pakistan Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Bhoruka Overseas - Indonesia
- Ind-Barath Power Infra Limited - India
- Dalmia Cement Bharat India
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Parliament of New Zealand
- Goldman Sachs - Singapore
- Sakthi Sugars Limited - India
- CIMB Investment Bank - Malaysia
- Mercator Lines Limited - India
- MS Steel International - UAE
- Thai Mozambique Logistica
- Formosa Plastics Group - Taiwan
- Port Waratah Coal Services - Australia
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- Indika Energy - Indonesia
- Borneo Indobara - Indonesia
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- Banpu Public Company Limited - Thailand
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- Eastern Coal Council - USA
- San Jose City I Power Corp, Philippines
- Uttam Galva Steels Limited - India
- Therma Luzon, Inc, Philippines
- VISA Power Limited - India
- The Treasury - Australian Government
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- ASAPP Information Group - India
- Electricity Authority, New Zealand
- PTC India Limited - India
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Mercuria Energy - Indonesia
- Trasteel International SA, Italy
- Makarim & Taira - Indonesia
- Indonesian Coal Mining Association
- Commonwealth Bank - Australia
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Petron Corporation, Philippines
- Larsen & Toubro Limited - India
- Videocon Industries ltd - India
- Bangladesh Power Developement Board
- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
- Rio Tinto Coal - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Bhatia International Limited - India
- Globalindo Alam Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Sojitz Corporation - Japan
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Central Electricity Authority - India
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- PowerSource Philippines DevCo
- Singapore Mercantile Exchange
- Jaiprakash Power Ventures ltd
- Global Coal Blending Company Limited - Australia
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Intertek Mineral Services - Indonesia
- Aditya Birla Group - India
- Lanco Infratech Ltd - India
- Semirara Mining Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Xindia Steels Limited - India
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- London Commodity Brokers - England
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- Indian Oil Corporation Limited
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Standard Chartered Bank - UAE
- Sical Logistics Limited - India
- Coastal Gujarat Power Limited - India
- Indian Energy Exchange, India
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- Bukit Makmur.PT - Indonesia
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- GVK Power & Infra Limited - India
- Romanian Commodities Exchange
- IHS Mccloskey Coal Group - USA
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