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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, 08 June 16
THE DRY BULK MARKET KEPT MOVING SIDEWAYS LAST WEEK; SECOND HAND PURCHASES MOVING NORTH - INTERMODAL
Once again its Posidonia time and the biannual exhibition takes place during a very warm June here in Athens, as if the performance of the dry bulk ...
Tuesday, 07 June 16
CS COAL INDEX ROSE FOR SECOND STRAIGHT WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin was up 0.38 percent week over week to averaging $39.16 per ton this past week, shows ...
Monday, 06 June 16
BDI GAINED ON A STRONGER DEMAND FOR CAPESIZE SHIPS
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose this past week on a stronger demand for Capesize ves ...
Friday, 03 June 16
DRY BULK VESSEL DELIVERIES COULD BE LESS THAN 50 MILLION DWT IN 2016, AS OWNERS DELAY OR CANCEL NEWBUILDING ORDERS
The dry bulk market has been caught between a rock and a hard place over the course of the past couple of years, as on one hand demand has plunged, ...
Friday, 03 June 16
U.S WEEKLY COAL PRODUCTION SLIDES 1.3% - EIA
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 11.5 million short tons (mm ...
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- Electricity Generating Authority of Thailand
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- Timah Investasi Mineral - Indoneisa
- Meenaskhi Energy Private Limited - India
- Salva Resources Pvt Ltd - India
- Orica Australia Pty. Ltd.
- GVK Power & Infra Limited - India
- Parliament of New Zealand
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- Bayan Resources Tbk. - Indonesia
- Orica Mining Services - Indonesia
- Antam Resourcindo - Indonesia
- Sree Jayajothi Cements Limited - India
- Makarim & Taira - Indonesia
- The University of Queensland
- Medco Energi Mining Internasional
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- Therma Luzon, Inc, Philippines
- Electricity Authority, New Zealand
- Ministry of Transport, Egypt
- Deloitte Consulting - India
- Africa Commodities Group - South Africa
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- Karbindo Abesyapradhi - Indoneisa
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- New Zealand Coal & Carbon
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- Indian Energy Exchange, India
- Kideco Jaya Agung - Indonesia
- Samtan Co., Ltd - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- San Jose City I Power Corp, Philippines
- Attock Cement Pakistan Limited
- Baramulti Group, Indonesia
- Eastern Energy - Thailand
- Maheswari Brothers Coal Limited - India
- GAC Shipping (India) Pvt Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Interocean Group of Companies - India
- Metalloyd Limited - United Kingdom
- Merrill Lynch Commodities Europe
- Sarangani Energy Corporation, Philippines
- Siam City Cement PLC, Thailand
- Chettinad Cement Corporation Ltd - India
- Coal and Oil Company - UAE
- Edison Trading Spa - Italy
- Economic Council, Georgia
- Central Java Power - Indonesia
- Kumho Petrochemical, South Korea
- Simpson Spence & Young - Indonesia
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- AsiaOL BioFuels Corp., Philippines
- TeaM Sual Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Kohat Cement Company Ltd. - Pakistan
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Indo Tambangraya Megah - Indonesia
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Mercuria Energy - Indonesia
- Bhatia International Limited - India
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Madhucon Powers Ltd - India
- Australian Coal Association
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Romanian Commodities Exchange
- Sindya Power Generating Company Private Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Bhoruka Overseas - Indonesia
- ASAPP Information Group - India
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- Directorate General of MIneral and Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Business Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Global Coal Blending Company Limited - Australia
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- CIMB Investment Bank - Malaysia
- Australian Commodity Traders Exchange
- Commonwealth Bank - Australia
- Ministry of Finance - Indonesia
- Intertek Mineral Services - Indonesia
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- Mjunction Services Limited - India
- International Coal Ventures Pvt Ltd - India
- PowerSource Philippines DevCo
- IEA Clean Coal Centre - UK
- Vizag Seaport Private Limited - India
- Mintek Dendrill Indonesia
- LBH Netherlands Bv - Netherlands
- Kepco SPC Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Sojitz Corporation - Japan
- Aboitiz Power Corporation - Philippines
- Georgia Ports Authority, United States
- Thiess Contractors Indonesia
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Grasim Industreis Ltd - India
- Port Waratah Coal Services - Australia
- Cement Manufacturers Association - India
- Essar Steel Hazira Ltd - India
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- London Commodity Brokers - England
- Wood Mackenzie - Singapore
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Jorong Barutama Greston.PT - Indonesia
- PTC India Limited - India
- Global Green Power PLC Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Renaissance Capital - South Africa
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- Heidelberg Cement - Germany
- Asmin Koalindo Tuhup - Indonesia
- MS Steel International - UAE
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- Oldendorff Carriers - Singapore
- Central Electricity Authority - India
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Gujarat Sidhee Cement - India
- Gujarat Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- Eastern Coal Council - USA
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- White Energy Company Limited
- Karaikal Port Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Marubeni Corporation - India
- Bukit Makmur.PT - Indonesia
- Riau Bara Harum - Indonesia
- Power Finance Corporation Ltd., India
- Chamber of Mines of South Africa
- European Bulk Services B.V. - Netherlands
- Holcim Trading Pte Ltd - Singapore
- GMR Energy Limited - India
- Posco Energy - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Billiton Holdings Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- Coastal Gujarat Power Limited - India
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- Carbofer General Trading SA - India
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