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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, 18 October 13
WOOD MACKENZIE FORECASTS CHINA WILL OUTWEIGH THE REST OF THE WORLD FOR BASE METALS DEMAND BY 2017
China set to account for 52% of 117mt base metals market by 2017
China is on track to exceed rest of the World demand by 2017, becoming the singl ...
Friday, 18 October 13
DRY BULK MARKET ON "PAUSE" MODE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been on "pause" mode over the past week, after China's return from the week long holidays. The industry's benchm ...
Friday, 18 October 13
US PRODUCED 6.7% MORE COAL W-W
COALspot.com – United States the world’s second largest coal producer produced approximately 18.9 million short tons (mmst) of coal in a ...
Thursday, 17 October 13
CAPESIZE: RATES ARE AGAIN MOVING UPWARDS - FEARNRESEARCH
Handy
Activities were obviously slowed down in the Pacific basin. There were only few coal movements which fixed around USD 15-16k for ships in Sin ...
Thursday, 17 October 13
SGX TO LAUNCH "SGX THERMAL COAL FUTURES" NEXT MONDAY
COALspot.com: SGX is to launch two thermal coal futures contracts, SGX API 8 CFR China Coal Index Futures and SGX IHS McCloskey Indonesian Sub-bit F ...
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- Therma Luzon, Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- Georgia Ports Authority, United States
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- IEA Clean Coal Centre - UK
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Krishnapatnam Port Company Ltd. - India
- Africa Commodities Group - South Africa
- Baramulti Group, Indonesia
- Parry Sugars Refinery, India
- VISA Power Limited - India
- Australian Commodity Traders Exchange
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- San Jose City I Power Corp, Philippines
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- Goldman Sachs - Singapore
- Directorate General of MIneral and Coal - Indonesia
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- Parliament of New Zealand
- Edison Trading Spa - Italy
- Ministry of Transport, Egypt
- Aditya Birla Group - India
- Global Green Power PLC Corporation, Philippines
- Merrill Lynch Commodities Europe
- Cement Manufacturers Association - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Coalindo Energy - Indonesia
- Economic Council, Georgia
- Tamil Nadu electricity Board
- Indian Energy Exchange, India
- New Zealand Coal & Carbon
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- PTC India Limited - India
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- Energy Development Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- Thiess Contractors Indonesia
- Holcim Trading Pte Ltd - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Bhushan Steel Limited - India
- Eastern Coal Council - USA
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Kartika Selabumi Mining - Indonesia
- Romanian Commodities Exchange
- London Commodity Brokers - England
- Meralco Power Generation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Bangladesh Power Developement Board
- Pendopo Energi Batubara - Indonesia
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- International Coal Ventures Pvt Ltd - India
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- Singapore Mercantile Exchange
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Price Waterhouse Coopers - Russia
- Jindal Steel & Power Ltd - India
- Central Java Power - Indonesia
- Bharathi Cement Corporation - India
- Savvy Resources Ltd - HongKong
- Bhatia International Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Globalindo Alam Lestari - Indonesia
- Renaissance Capital - South Africa
- Sakthi Sugars Limited - India
- Interocean Group of Companies - India
- Kaltim Prima Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Wood Mackenzie - Singapore
- Jaiprakash Power Ventures ltd
- Borneo Indobara - Indonesia
- Iligan Light & Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Ambuja Cements Ltd - India
- Star Paper Mills Limited - India
- Karaikal Port Pvt Ltd - India
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- Directorate Of Revenue Intelligence - India
- Chamber of Mines of South Africa
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- India Bulls Power Limited - India
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Minerals Council of Australia
- Kideco Jaya Agung - Indonesia
- Straits Asia Resources Limited - Singapore
- Lanco Infratech Ltd - India
- Coastal Gujarat Power Limited - India
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- GAC Shipping (India) Pvt Ltd
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- Grasim Industreis Ltd - India
- White Energy Company Limited
- Ministry of Mines - Canada
- Madhucon Powers Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- SMC Global Power, Philippines
- GVK Power & Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Sindya Power Generating Company Private Ltd
- Electricity Generating Authority of Thailand
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- Vedanta Resources Plc - India
- Indogreen Group - Indonesia
- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- Xindia Steels Limited - India
- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Sojitz Corporation - Japan
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- TeaM Sual Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Vizag Seaport Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- Aboitiz Power Corporation - Philippines
- Deloitte Consulting - India
- Trasteel International SA, Italy
- Orica Mining Services - Indonesia
- Metalloyd Limited - United Kingdom
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- OPG Power Generation Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Orica Australia Pty. Ltd.
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- Latin American Coal - Colombia
- The University of Queensland
- Central Electricity Authority - India
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- LBH Netherlands Bv - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Commonwealth Bank - Australia
- Rashtriya Ispat Nigam Limited - India
- Bukit Baiduri Energy - Indonesia
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Siam City Cement PLC, Thailand
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Agrawal Coal Company - India
- ASAPP Information Group - India
- Mercator Lines Limited - India
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Uttam Galva Steels Limited - India
- Port Waratah Coal Services - Australia
- Petron Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
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