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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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Sunday, 13 October 13
API 8 CFR SOUTH CHINA COAL - AVERAGE Q4 2013 DELIVERY FELL 0.30 PERCEPT ON WEEK
COALspot.com : API 8 CFR South China Coal swaps for average Q4 2013 delivery fell 0.30 percept week on week on Friday 11 October 2013. The CFR South ...
Saturday, 12 October 13
PANAMAX: OWNERS ARE AT US$ 17-18.5K PER DAY; CHARTERERS ARE AT US$ 15.5-16K - CAPT. REDDY
COALspot.com - The futures market was heavily down on the cape size vessels and the physical average charterer rates on cape size vessels dropped by ...
Friday, 11 October 13
DRY BULK FREIGHT RATE POSITIVE MOMENTUM TO BE SUPPORTED BY HIGHER DEMAND SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
BIMCO released its latest short term research on the shipping markets, estimating that the elevated level of Capesize TC average rates i ...
Friday, 11 October 13
US COAL PRODUCTION FALLS 7.70% IN SEPTEMBER
COALspot.com – United States the world’s second largest coal producer produced approximately 17.70 million short tons (mmst) of coal in ...
Thursday, 10 October 13
NPC AUSTRALIA SHIPPED 2.99 MILLION TONS OF COAL W-O-W
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 12.04 per cent week on week to 2.99 million mt for ...
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- Renaissance Capital - South Africa
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- Kapuas Tunggal Persada - Indonesia
- VISA Power Limited - India
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- Georgia Ports Authority, United States
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- Vijayanagar Sugar Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Thai Mozambique Logistica
- Planning Commission, India
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- Deloitte Consulting - India
- Posco Energy - South Korea
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- Grasim Industreis Ltd - India
- Ministry of Finance - Indonesia
- Toyota Tsusho Corporation, Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
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- South Luzon Thermal Energy Corporation
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- The State Trading Corporation of India Ltd
- Indian Oil Corporation Limited
- TNB Fuel Sdn Bhd - Malaysia
- India Bulls Power Limited - India
- Sarangani Energy Corporation, Philippines
- Vizag Seaport Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Edison Trading Spa - Italy
- Romanian Commodities Exchange
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- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- The Treasury - Australian Government
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- Independent Power Producers Association of India
- LBH Netherlands Bv - Netherlands
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- PTC India Limited - India
- Electricity Generating Authority of Thailand
- CNBM International Corporation - China
- Indian Energy Exchange, India
- Tamil Nadu electricity Board
- Kobexindo Tractors - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- GMR Energy Limited - India
- Wilmar Investment Holdings
- Commonwealth Bank - Australia
- Intertek Mineral Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Power Finance Corporation Ltd., India
- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Chettinad Cement Corporation Ltd - India
- London Commodity Brokers - England
- Eastern Coal Council - USA
- Star Paper Mills Limited - India
- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Thiess Contractors Indonesia
- Central Java Power - Indonesia
- Banpu Public Company Limited - Thailand
- IHS Mccloskey Coal Group - USA
- Global Coal Blending Company Limited - Australia
- Kaltim Prima Coal - Indonesia
- Indogreen Group - Indonesia
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- PowerSource Philippines DevCo
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Bhatia International Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining and Power Corporation, Philippines
- Coal and Oil Company - UAE
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Australian Coal Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement PLC, Thailand
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- Uttam Galva Steels Limited - India
- Mercator Lines Limited - India
- Meenaskhi Energy Private Limited - India
- Gujarat Sidhee Cement - India
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Asmin Koalindo Tuhup - Indonesia
- SMG Consultants - Indonesia
- Bulk Trading Sa - Switzerland
- Indonesian Coal Mining Association
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- Central Electricity Authority - India
- Cement Manufacturers Association - India
- ICICI Bank Limited - India
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
- Vedanta Resources Plc - India
- Tata Chemicals Ltd - India
- Kepco SPC Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Trasteel International SA, Italy
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- Agrawal Coal Company - India
- Meralco Power Generation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Wood Mackenzie - Singapore
- Madhucon Powers Ltd - India
- ASAPP Information Group - India
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- Indika Energy - Indonesia
- Marubeni Corporation - India
- Bayan Resources Tbk. - Indonesia
- Barasentosa Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Ambuja Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Mercuria Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Port Waratah Coal Services - Australia
- IEA Clean Coal Centre - UK
- Goldman Sachs - Singapore
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- Binh Thuan Hamico - Vietnam
- Minerals Council of Australia
- Altura Mining Limited, Indonesia
- Borneo Indobara - Indonesia
- Attock Cement Pakistan Limited
- Bhushan Steel Limited - India
- OPG Power Generation Pvt Ltd - India
- Sakthi Sugars Limited - India
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- New Zealand Coal & Carbon
- The University of Queensland
- Latin American Coal - Colombia
- Dalmia Cement Bharat India
- SMC Global Power, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- Chamber of Mines of South Africa
- Carbofer General Trading SA - India
- Standard Chartered Bank - UAE
- Straits Asia Resources Limited - Singapore
- Orica Mining Services - Indonesia
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