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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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Thursday, 10 October 13
SEVERAL PANAMAX FIXTURES FOR 1 YEAR TC HAVE BEEN REPORTED AROUND $13.5K/DAY - FEARNRESEARCH
Handy
The market is not much fancy as several holidays in the Far East last week. Tonnage side seems tight in SE Asia but there are many of them in ...
Wednesday, 09 October 13
PANAMAX: FIRM ; FIXING ACTIVITY INCREASED IN BOTH BASINS - INTERMODAL
This was another week of gains for the Dry Bulk market, albeit very modest ones compared to the previous ones. Charterers and owners struggled for t ...
Tuesday, 08 October 13
CHINA: INTENSE COMPETITION AMONG DOMESTIC COAL MINERS AS 2013 IMPORT DEMAND REMAINS STRONG - WOOD MACKENZIE
Prices will not fall under RMB500/t or risk supply availability to the coastal market
Despite China's lower economic growth, Wood Mackenzie says ...
Monday, 07 October 13
RICHARD BAY COAL TERMINAL SHIPPED 49.94 MMT OF COAL YTD
COALspot.com - Richards Bay Coal Terminal (RBCT), the world's single largest coal terminal has shipped 49,946,509 mt of coals YTD, according to por ...
Monday, 07 October 13
SOUTH AFRICA'S RBCT SHIPPED 7.94% MORE COAL IN SEPT' 13
COALspot.com - Richards Bay Coal Terminal (RBCT), the single largest coal export terminal in South Africa as well as in the world has shipped 7.94 p ...
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- PetroVietnam Power Coal Import and Supply Company
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Thai Mozambique Logistica
- Independent Power Producers Association of India
- Star Paper Mills Limited - India
- IEA Clean Coal Centre - UK
- PowerSource Philippines DevCo
- Thiess Contractors Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bhatia International Limited - India
- CIMB Investment Bank - Malaysia
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Baramulti Group, Indonesia
- Bayan Resources Tbk. - Indonesia
- Ambuja Cements Ltd - India
- Grasim Industreis Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- TNB Fuel Sdn Bhd - Malaysia
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- Singapore Mercantile Exchange
- European Bulk Services B.V. - Netherlands
- Kartika Selabumi Mining - Indonesia
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Energy - Thailand
- Videocon Industries ltd - India
- Ministry of Mines - Canada
- Wood Mackenzie - Singapore
- Vedanta Resources Plc - India
- Kohat Cement Company Ltd. - Pakistan
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- Barasentosa Lestari - Indonesia
- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Oldendorff Carriers - Singapore
- Maheswari Brothers Coal Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- Attock Cement Pakistan Limited
- Toyota Tsusho Corporation, Japan
- Jindal Steel & Power Ltd - India
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Straits Asia Resources Limited - Singapore
- GMR Energy Limited - India
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- SN Aboitiz Power Inc, Philippines
- Mercuria Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Aditya Birla Group - India
- Wilmar Investment Holdings
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- Larsen & Toubro Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Lanco Infratech Ltd - India
- Cement Manufacturers Association - India
- Australian Coal Association
- Bangladesh Power Developement Board
- Economic Council, Georgia
- Romanian Commodities Exchange
- Coastal Gujarat Power Limited - India
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- Intertek Mineral Services - Indonesia
- Electricity Generating Authority of Thailand
- Posco Energy - South Korea
- India Bulls Power Limited - India
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- Savvy Resources Ltd - HongKong
- Vizag Seaport Private Limited - India
- Riau Bara Harum - Indonesia
- Altura Mining Limited, Indonesia
- Minerals Council of Australia
- Electricity Authority, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Global Green Power PLC Corporation, Philippines
- Mintek Dendrill Indonesia
- Petron Corporation, Philippines
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Maharashtra Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- The University of Queensland
- IHS Mccloskey Coal Group - USA
- Indian Oil Corporation Limited
- Goldman Sachs - Singapore
- Therma Luzon, Inc, Philippines
- Tamil Nadu electricity Board
- Heidelberg Cement - Germany
- Standard Chartered Bank - UAE
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- Australian Commodity Traders Exchange
- Eastern Coal Council - USA
- Cigading International Bulk Terminal - Indonesia
- Carbofer General Trading SA - India
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- The Treasury - Australian Government
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Asmin Koalindo Tuhup - Indonesia
- Commonwealth Bank - Australia
- Sojitz Corporation - Japan
- Uttam Galva Steels Limited - India
- London Commodity Brokers - England
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
- Iligan Light & Power Inc, Philippines
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- Parry Sugars Refinery, India
- Chamber of Mines of South Africa
- Aboitiz Power Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Sinarmas Energy and Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- Banpu Public Company Limited - Thailand
- Pendopo Energi Batubara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- White Energy Company Limited
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kumho Petrochemical, South Korea
- Medco Energi Mining Internasional
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- Sical Logistics Limited - India
- Energy Development Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Xindia Steels Limited - India
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Global Coal Blending Company Limited - Australia
- Makarim & Taira - Indonesia
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- SMG Consultants - Indonesia
- Orica Mining Services - Indonesia
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Meenaskhi Energy Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bharathi Cement Corporation - India
- Bukit Baiduri Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Global Business Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Latin American Coal - Colombia
- Ceylon Electricity Board - Sri Lanka
- Rio Tinto Coal - Australia
- Port Waratah Coal Services - Australia
- Central Java Power - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
- Trasteel International SA, Italy
- Chettinad Cement Corporation Ltd - India
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