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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, 15 October 13
CHINA COAL IMPORTS TO KEEP GROWING IN THE YEARS TO COME, ALBEIT AT A SLOWER RATE - EVA TZIMA / NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest monthly report, shipbroker Intermodal highlighted the growing role of coal in the energy mix. According to Intermodal's research anal ...
Tuesday, 15 October 13
NEWCASTLE PORT SHIPPED 6.50% MORE COAL W-O-W
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 6.50 per cent week on week to 3.19 million mt for ...
Monday, 14 October 13
MEMR OF INDONESIA SETS THE COAL'S SPOT PRICE AT US$ 76.61 FOR OCT'13 DELIVERY
COALspot. com - The Indonesian government has revised down government declared coal bench mark price by US$ 0.28/ MT to US$ 76.61 for October 2013 d ...
Monday, 14 October 13
CARBON POLICIES UNLIKELY TO PREVENT A COAL-FUELLED WORLD - WOOD MACKENZIE
China will propel coal growth but US, Europe and Asia will sustain global demand.
At the World Energy Congress (WEC) today Wood Mackenzie's Pres ...
Sunday, 13 October 13
Q4'13 DELIVERY SUB-BIT INDO COAL SWAP FALLS SEVEN STRAIGHT WEEK
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery fell 1.72 percept month on month on Friday 11 October 201 ...
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- Ambuja Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- SMG Consultants - Indonesia
- Makarim & Taira - Indonesia
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- Therma Luzon, Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Oldendorff Carriers - Singapore
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- Bayan Resources Tbk. - Indonesia
- GAC Shipping (India) Pvt Ltd
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- Parliament of New Zealand
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- TeaM Sual Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Rio Tinto Coal - Australia
- Central Java Power - Indonesia
- Trasteel International SA, Italy
- Tamil Nadu electricity Board
- VISA Power Limited - India
- Independent Power Producers Association of India
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Wood Mackenzie - Singapore
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- Maheswari Brothers Coal Limited - India
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- Goldman Sachs - Singapore
- Cigading International Bulk Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Kumho Petrochemical, South Korea
- Asmin Koalindo Tuhup - Indonesia
- CNBM International Corporation - China
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meenaskhi Energy Private Limited - India
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- PetroVietnam Power Coal Import and Supply Company
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- Vizag Seaport Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Port Waratah Coal Services - Australia
- Intertek Mineral Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Antam Resourcindo - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Lanco Infratech Ltd - India
- Meralco Power Generation, Philippines
- Kepco SPC Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Holcim Trading Pte Ltd - Singapore
- New Zealand Coal & Carbon
- Mjunction Services Limited - India
- Ministry of Finance - Indonesia
- GVK Power & Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Cement Manufacturers Association - India
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- Bahari Cakrawala Sebuku - Indonesia
- Power Finance Corporation Ltd., India
- Sakthi Sugars Limited - India
- Savvy Resources Ltd - HongKong
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Malabar Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- MS Steel International - UAE
- Karaikal Port Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Standard Chartered Bank - UAE
- Indian Oil Corporation Limited
- Australian Commodity Traders Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Aboitiz Power Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Tata Chemicals Ltd - India
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- Deloitte Consulting - India
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
- Siam City Cement PLC, Thailand
- Directorate General of MIneral and Coal - Indonesia
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Energy Development Corp, Philippines
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Interocean Group of Companies - India
- Borneo Indobara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- Energy Link Ltd, New Zealand
- India Bulls Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coal and Oil Company - UAE
- Globalindo Alam Lestari - Indonesia
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Kobexindo Tractors - Indoneisa
- Bangladesh Power Developement Board
- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- Bhatia International Limited - India
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- Bukit Baiduri Energy - Indonesia
- Singapore Mercantile Exchange
- European Bulk Services B.V. - Netherlands
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- Dalmia Cement Bharat India
- London Commodity Brokers - England
- Baramulti Group, Indonesia
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Australian Coal Association
- Madhucon Powers Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Manunggal Multi Energi - Indonesia
- Planning Commission, India
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- Commonwealth Bank - Australia
- Eastern Energy - Thailand
- Miang Besar Coal Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Chamber of Mines of South Africa
- Directorate Of Revenue Intelligence - India
- Thiess Contractors Indonesia
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- Billiton Holdings Pty Ltd - Australia
- Renaissance Capital - South Africa
- Chettinad Cement Corporation Ltd - India
- Salva Resources Pvt Ltd - India
- Videocon Industries ltd - India
- The State Trading Corporation of India Ltd
- Wilmar Investment Holdings
- GN Power Mariveles Coal Plant, Philippines
- Bhoruka Overseas - Indonesia
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Georgia Ports Authority, United States
- Mercuria Energy - Indonesia
- Economic Council, Georgia
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- Gujarat Sidhee Cement - India
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- White Energy Company Limited
- Minerals Council of Australia
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Metalloyd Limited - United Kingdom
- Indian Energy Exchange, India
- Posco Energy - South Korea
- Semirara Mining Corp, Philippines
- Carbofer General Trading SA - India
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- The University of Queensland
- Ministry of Mines - Canada
- Orica Mining Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Kartika Selabumi Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Simpson Spence & Young - Indonesia
- Iligan Light & Power Inc, Philippines
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