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Tuesday, 10 May 16
VOLATILITY? VARIATION NO ENIGMA TO SHIPPING..... - CLARKSONS
 Along with cyclicality, the other characteristic of the shipping markets which receives frequent mention is volatility. This is so evident that the shipping markets are often reported to be many times more volatile than the stock markets or other fluctuating economic variables. Here we take a look at some metrics which shine some light on the relative volatility of the industry.
Measuring The Waves
Many metrics can be used to measure aspects of volatility (though none are perfect). A few are calculated here to compare volatility in the shipping markets with that in the stock and commodity markets. One classic measure of volatility is the ‘coefficient of variation’ which takes the standard deviation of a series over time (a measure of the degree of dispersion of observations in a series) and divides it by the mean (average) level of the series.
Volatile Business
This metric highlights the degree of volatility present in the shipping markets (see graph). For the ClarkSea Index it stands at 50%, for VLCC spot earnings 73% and Capesize spot earnings 104%. For the FTSE-100 the figure stands at 29% and for the S&P 500 43%. The stock markets, often thought highly capricious, appear to be quite a bit less volatile than shipping on this basis (and given that stock markets generally track a trend rather than a cycle, one might have expected their coefficients to be biased upwards). The oil price compares more closely to shipping; the figure for Brent crude stands at 73%. Another useful metric is the average absolute monthly change as a percentage of the mean. For the ClarkSea Index this stands at 8%, for VLCC spot earnings at 26% and Capesize spot earnings 18%. For the FTSE-100 and S&P 500 this stands at around 3% and for Brent at around 6%, so again much lower.
Of course this analysis doesn’t capture everything. It excludes week-to-week (or day-to-day) volatility, though one might suppose that this could further emphasise shipping’s volatility (for example, see VLCC spot earnings on page 2). Equally it does not handle (or ‘de-trend’) indicators differently to account for the fact that stock markets typically follow a long-term trend, rather than a cycle like shipping.
Variation On A Theme?
But, even using a regression approach to ascertain variation from simple trend levels, over 60% of the FTSE-100 movement is explained by the trend. In shipping, much more of the variation appears to remain ‘unexplained’ (less than 10% of the variation of the ClarkSea Index would be accounted for by a simple trend).
Need Good Sea Legs?
So, volatility in shipping easily holds its own against fluctuations in other economic phenomena. It’s a competitive business, and rapid changes in pricing can be driven by the steepness of the supply curve at the margins, as well as a range of quite unpredictable factors. This helps make shipping interesting for asset players and short-term speculators but tricky for investors looking for certainty of return and analysts looking for a clear picture. Like seafarers themselves, shipping market players can quite rightly point to having the stomach for ups and downs as much as anyone.
Have a nice day.
Source: Clarksons
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Wednesday, 20 July 16
EDIBLE OIL MARKETS ACROSS THE GLOBE REMAIN UNDER PRESSURE - STELIOS KOLLINTZAS
The edible oil markets across the globe remain under pressure on the back of lackluster demand. Some of the main factors causing the low activity a ...
Tuesday, 19 July 16
INDONESIAN THERMAL COAL INDEXES CONTINUALLY FIRM UP ON ROBUST BUYING INTEREST - CS COAL INDEX
COALspot.com: Average 5000 GAR coal index of Indonesian origin rose One percent week over week to averaging $40.38 per ton this past week, shows CS ...
Monday, 18 July 16
FROM PIT TO PORT: DRY BULK NEEDS A NEW PATH TO PROFITABILITY - TOC EUROPE
During the golden years for commodities, from 2005 to 2014, high demand and big profit margins pushed companies to produce more and more, sacrifici ...
Monday, 18 July 16
BALTIC DRY INDEX REMAIN FIRM, UP BY 5.97 WEEK OVER WEEK
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued to remain firm with all segments ending in posi ...
Friday, 15 July 16
US COAL PRODUCTION DOWN 8.4% WEEK-OVER-WEEK
COALspot.com – U.S, world’s second largest coal producers has produced approximately totalled an estimated 12.9 million short tons (mms ...
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- Xindia Steels Limited - India
- Deloitte Consulting - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Mintek Dendrill Indonesia
- Cement Manufacturers Association - India
- Power Finance Corporation Ltd., India
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- Parry Sugars Refinery, India
- Posco Energy - South Korea
- Riau Bara Harum - Indonesia
- IEA Clean Coal Centre - UK
- PetroVietnam Power Coal Import and Supply Company
- Kartika Selabumi Mining - Indonesia
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Bulk Trading Sa - Switzerland
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Eastern Coal Council - USA
- OPG Power Generation Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- Semirara Mining Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- Coal and Oil Company - UAE
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Formosa Plastics Group - Taiwan
- Attock Cement Pakistan Limited
- The University of Queensland
- Chamber of Mines of South Africa
- PNOC Exploration Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- Dalmia Cement Bharat India
- Manunggal Multi Energi - Indonesia
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Gujarat Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Indian Energy Exchange, India
- ICICI Bank Limited - India
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Sarangani Energy Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Australian Coal Association
- Essar Steel Hazira Ltd - India
- Barasentosa Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- Neyveli Lignite Corporation Ltd, - India
- Vizag Seaport Private Limited - India
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Marubeni Corporation - India
- Salva Resources Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Central Java Power - Indonesia
- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- Cigading International Bulk Terminal - Indonesia
- Aditya Birla Group - India
- Carbofer General Trading SA - India
- Indogreen Group - Indonesia
- Energy Link Ltd, New Zealand
- Baramulti Group, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- Chettinad Cement Corporation Ltd - India
- Banpu Public Company Limited - Thailand
- GVK Power & Infra Limited - India
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Straits Asia Resources Limited - Singapore
- Interocean Group of Companies - India
- Indonesian Coal Mining Association
- Borneo Indobara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- Planning Commission, India
- South Luzon Thermal Energy Corporation
- Rashtriya Ispat Nigam Limited - India
- Energy Development Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Sindya Power Generating Company Private Ltd
- London Commodity Brokers - England
- Wood Mackenzie - Singapore
- CIMB Investment Bank - Malaysia
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Thiess Contractors Indonesia
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- Australian Commodity Traders Exchange
- Ministry of Finance - Indonesia
- Mercuria Energy - Indonesia
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Antam Resourcindo - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Iligan Light & Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- Orica Australia Pty. Ltd.
- Rio Tinto Coal - Australia
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- Central Electricity Authority - India
- Independent Power Producers Association of India
- MS Steel International - UAE
- Medco Energi Mining Internasional
- Sojitz Corporation - Japan
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- Mercator Lines Limited - India
- Ambuja Cements Ltd - India
- Madhucon Powers Ltd - India
- Bhushan Steel Limited - India
- Videocon Industries ltd - India
- Vedanta Resources Plc - India
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- Coastal Gujarat Power Limited - India
- Thai Mozambique Logistica
- Renaissance Capital - South Africa
- Alfred C Toepfer International GmbH - Germany
- Price Waterhouse Coopers - Russia
- Tamil Nadu electricity Board
- Heidelberg Cement - Germany
- Makarim & Taira - Indonesia
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wilmar Investment Holdings
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- Ministry of Mines - Canada
- New Zealand Coal & Carbon
- Bharathi Cement Corporation - India
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- Minerals Council of Australia
- SMG Consultants - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- TeaM Sual Corporation - Philippines
- Mjunction Services Limited - India
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- Parliament of New Zealand
- Simpson Spence & Young - Indonesia
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
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