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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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Wednesday, 02 October 13
HOW LONG WILL THIS LATEST CAPESIZE RALLY LAST? - TASOS PAPADOPOULOS
By Tasos Papadopoulos, SnP Broker, Intermodal
The surge in iron ore trade has translated into a massive boost in daily earnings for capes; with t ...
Monday, 30 September 13
NEWCASTLE'S COAL EXPORT VOLUME CONTINUES TO SLIP
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port fell 8.38 per cent week on week to 2.67 million mt fo ...
Monday, 30 September 13
PANAMAX CHARTER RATES TOUCHING US$ 18K FOR A TRIP TO NOPAC - CAPT. REDDY
COALspot.com : The freight market continued to remain firm, BDI and the Panamax index up week ended 27 September 2013.
The cape index was fell to ...
Sunday, 29 September 13
API 8 CFR SOUTH CHINA COAL Q3 2014 DELIVERY SWAP GAINED $1.19 M-O-M
COALspot.com : SGX has launched API 8 CFR South China Coal Swap on 29 April 2013 and SGX replaced the previous swap.
API 8 CFR South China Coal s ...
Sunday, 29 September 13
SUB-BIT INDONESIA COAL SWAP FELL ON MONTH AND WEEK
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery fell 3.93 percept month on month on Friday 27 September 2 ...
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- Miang Besar Coal Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Manunggal Multi Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- MS Steel International - UAE
- Timah Investasi Mineral - Indoneisa
- Electricity Generating Authority of Thailand
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Simpson Spence & Young - Indonesia
- Ambuja Cements Ltd - India
- Videocon Industries ltd - India
- Meralco Power Generation, Philippines
- The State Trading Corporation of India Ltd
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Jindal Steel & Power Ltd - India
- Energy Link Ltd, New Zealand
- Uttam Galva Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Singapore Mercantile Exchange
- PetroVietnam Power Coal Import and Supply Company
- Port Waratah Coal Services - Australia
- Rashtriya Ispat Nigam Limited - India
- Orica Australia Pty. Ltd.
- Bulk Trading Sa - Switzerland
- Star Paper Mills Limited - India
- Goldman Sachs - Singapore
- Sindya Power Generating Company Private Ltd
- Planning Commission, India
- South Luzon Thermal Energy Corporation
- Samtan Co., Ltd - South Korea
- Australian Coal Association
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- Energy Development Corp, Philippines
- Mercuria Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- McConnell Dowell - Australia
- Makarim & Taira - Indonesia
- Malabar Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Independent Power Producers Association of India
- Global Coal Blending Company Limited - Australia
- Romanian Commodities Exchange
- Bhatia International Limited - India
- Banpu Public Company Limited - Thailand
- Parry Sugars Refinery, India
- Barasentosa Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
- Maharashtra Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Trasteel International SA, Italy
- Salva Resources Pvt Ltd - India
- Renaissance Capital - South Africa
- Sical Logistics Limited - India
- White Energy Company Limited
- SMC Global Power, Philippines
- Intertek Mineral Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Attock Cement Pakistan Limited
- IEA Clean Coal Centre - UK
- Edison Trading Spa - Italy
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- Borneo Indobara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kumho Petrochemical, South Korea
- San Jose City I Power Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- VISA Power Limited - India
- Mjunction Services Limited - India
- Jaiprakash Power Ventures ltd
- SMG Consultants - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- LBH Netherlands Bv - Netherlands
- Chamber of Mines of South Africa
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- Sree Jayajothi Cements Limited - India
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Tata Chemicals Ltd - India
- Eastern Coal Council - USA
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Coastal Gujarat Power Limited - India
- Xindia Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Larsen & Toubro Limited - India
- Orica Mining Services - Indonesia
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- Savvy Resources Ltd - HongKong
- Bayan Resources Tbk. - Indonesia
- Binh Thuan Hamico - Vietnam
- Sakthi Sugars Limited - India
- Kideco Jaya Agung - Indonesia
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- Australian Commodity Traders Exchange
- PTC India Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Sarangani Energy Corporation, Philippines
- Bangladesh Power Developement Board
- Indian Oil Corporation Limited
- Rio Tinto Coal - Australia
- Indo Tambangraya Megah - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- The University of Queensland
- Formosa Plastics Group - Taiwan
- Thai Mozambique Logistica
- Aditya Birla Group - India
- Pendopo Energi Batubara - Indonesia
- GVK Power & Infra Limited - India
- Mercator Lines Limited - India
- Vedanta Resources Plc - India
- Vizag Seaport Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Dalmia Cement Bharat India
- Riau Bara Harum - Indonesia
- Antam Resourcindo - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement PLC, Thailand
- Medco Energi Mining Internasional
- Oldendorff Carriers - Singapore
- Indogreen Group - Indonesia
- Agrawal Coal Company - India
- Lanco Infratech Ltd - India
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- The Treasury - Australian Government
- Coal and Oil Company - UAE
- ASAPP Information Group - India
- Cigading International Bulk Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Latin American Coal - Colombia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- Deloitte Consulting - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
- Global Business Power Corporation, Philippines
- Parliament of New Zealand
- Commonwealth Bank - Australia
- Semirara Mining Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- Bhoruka Overseas - Indonesia
- Electricity Authority, New Zealand
- GMR Energy Limited - India
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- CIMB Investment Bank - Malaysia
- Standard Chartered Bank - UAE
- Kalimantan Lumbung Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Maheswari Brothers Coal Limited - India
- Directorate General of MIneral and Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Directorate Of Revenue Intelligence - India
- IHS Mccloskey Coal Group - USA
- Ceylon Electricity Board - Sri Lanka
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