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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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Monday, 11 July 16
THE MAIN SEA FREIGHT INDEX, BDI ROSE FURTHER ON 8 JULY DUE TO STRONG DEMAND FOR PANAMAX SHIPS
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose this past week. The BDI was up 3.84 percent from las ...
Monday, 11 July 16
DRY BULK MARKET: UP TO 30 MILLION DWT OF OLDER BULKERS WILL NEED TO BE SCRAPPED BY END OF 2017 FOR MARKET TO FIND BALANCE
Tonnage oversupply in the dry bulk market is more than evident, as newbuildings have been hitting the water faster than owners can scrap their olde ...
Friday, 08 July 16
U.S. WEEKLY COAL OUTPUT UP 3% TO 14.1 MMST - EIA
COALspot.com – U.S, world’s second largest coal producers has produced approximately totalled an estimated 14.1 million short tons (mms ...
Thursday, 07 July 16
PANAMAX : THE TENDENCY FROM LAST WEEK CONTINUES WITH A CONSIDERABLY STRONGER SENTIMENT ALL ACROSS THE BLOCK - FEARNLEYS
Capesize
Rates have been holding at steady levels over the last weeks but towards end of this period they are becoming under more pressure as gen ...
Thursday, 07 July 16
CONSOLIDATION TO RULE OVER SHIPPING, AS EXECUTIVES SEEK INVESTMENT OPPORTUNITIES IN CHINA, INDIA AND EUROPE SAYS NORTON ROSE SURVEY
The transport sector is looking to Asia Pacific as the key market for investment over the next five years, according to the seventh The way ahead T ...
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- Jindal Steel & Power Ltd - India
- Oldendorff Carriers - Singapore
- IEA Clean Coal Centre - UK
- Merrill Lynch Commodities Europe
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Sinarmas Energy and Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- Heidelberg Cement - Germany
- The State Trading Corporation of India Ltd
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- Therma Luzon, Inc, Philippines
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Metalloyd Limited - United Kingdom
- Mintek Dendrill Indonesia
- The Treasury - Australian Government
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- Bhatia International Limited - India
- Riau Bara Harum - Indonesia
- Vedanta Resources Plc - India
- Interocean Group of Companies - India
- Kartika Selabumi Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercuria Energy - Indonesia
- Meralco Power Generation, Philippines
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- Indika Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Trasteel International SA, Italy
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- Indo Tambangraya Megah - Indonesia
- OPG Power Generation Pvt Ltd - India
- Medco Energi Mining Internasional
- Price Waterhouse Coopers - Russia
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- Krishnapatnam Port Company Ltd. - India
- AsiaOL BioFuels Corp., Philippines
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- Parliament of New Zealand
- PTC India Limited - India
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- Petron Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- TeaM Sual Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Billiton Holdings Pty Ltd - Australia
- Aditya Birla Group - India
- Planning Commission, India
- Wilmar Investment Holdings
- Kalimantan Lumbung Energi - Indonesia
- SMG Consultants - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Parry Sugars Refinery, India
- Australian Commodity Traders Exchange
- Latin American Coal - Colombia
- Ministry of Finance - Indonesia
- Bukit Makmur.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- Central Electricity Authority - India
- London Commodity Brokers - England
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Mines - Canada
- Ind-Barath Power Infra Limited - India
- Simpson Spence & Young - Indonesia
- Samtan Co., Ltd - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- Central Java Power - Indonesia
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- New Zealand Coal & Carbon
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Romanian Commodities Exchange
- Videocon Industries ltd - India
- Global Coal Blending Company Limited - Australia
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- PowerSource Philippines DevCo
- Kaltim Prima Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- MS Steel International - UAE
- San Jose City I Power Corp, Philippines
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Mercator Lines Limited - India
- Leighton Contractors Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Cement Manufacturers Association - India
- Tamil Nadu electricity Board
- Directorate General of MIneral and Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Goldman Sachs - Singapore
- Energy Development Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Georgia Ports Authority, United States
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Altura Mining Limited, Indonesia
- The University of Queensland
- Kumho Petrochemical, South Korea
- Chamber of Mines of South Africa
- Maheswari Brothers Coal Limited - India
- Posco Energy - South Korea
- Intertek Mineral Services - Indonesia
- Grasim Industreis Ltd - India
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Holcim Trading Pte Ltd - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- White Energy Company Limited
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- McConnell Dowell - Australia
- Miang Besar Coal Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Makarim & Taira - Indonesia
- ASAPP Information Group - India
- Bulk Trading Sa - Switzerland
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- South Luzon Thermal Energy Corporation
- Jaiprakash Power Ventures ltd
- GAC Shipping (India) Pvt Ltd
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bangladesh Power Developement Board
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Bharathi Cement Corporation - India
- Minerals Council of Australia
- Anglo American - United Kingdom
- Toyota Tsusho Corporation, Japan
- Sree Jayajothi Cements Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- Sical Logistics Limited - India
- Malabar Cements Ltd - India
- Renaissance Capital - South Africa
- Power Finance Corporation Ltd., India
- Electricity Authority, New Zealand
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Larsen & Toubro Limited - India
- Kideco Jaya Agung - Indonesia
- Energy Link Ltd, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining and Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Coal Association
- Attock Cement Pakistan Limited
- Straits Asia Resources Limited - Singapore
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- Indonesian Coal Mining Association
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Sidhee Cement - India
- SMC Global Power, Philippines
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