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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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Tuesday, 17 May 16
INDONESIAN COAL PRICE REFERENCE DECLINE AGAIN
COALspot.com: The Indonesia Coal Benchmark Price declined in May 2016.
The Director General of Mineral and Coal of Indonesia, the regulator of ...
Tuesday, 17 May 16
CHINA THERMAL-POWER OVERSUPPLY TO WORSEN - FITCH
COALspot.com: The overcapacity in thermal-power generation in China is likely to worsen in 2016 to 2017, Fitch Ratings says in a new report.
F ...
Tuesday, 17 May 16
ON YOUR MARKS: TRACKING CHINESE TRADE - CLARKSONS
One of the major drivers behind the challenges currently facing many of the shipping markets has been slower demand growth. World seaborne trade gr ...
Monday, 16 May 16
INDONESIAN WEEKLY COAL INDICES AT POSITIVE LEVELS - CS (I) COAL INDEX
COALspot.com: Average 5000 GAR coal index of Indonesian origin up 0.31 percent week over week to averaging $38.94 per ton this past week, shows CS ...
Monday, 16 May 16
OPEC SEES RIVAL OIL PRODUCTION DECLINING
Crude Oil Price Movements
The OPEC Reference Basket averaged $37.86/b in April, a gain of $3.21 or 9.3%. This was 40% higher than the lows reache ...
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- Minerals Council of Australia
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- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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- Bahari Cakrawala Sebuku - Indonesia
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- Australian Coal Association
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- Indonesian Coal Mining Association
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- Borneo Indobara - Indonesia
- Deloitte Consulting - India
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- Simpson Spence & Young - Indonesia
- GAC Shipping (India) Pvt Ltd
- Globalindo Alam Lestari - Indonesia
- GMR Energy Limited - India
- London Commodity Brokers - England
- Banpu Public Company Limited - Thailand
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- IHS Mccloskey Coal Group - USA
- Neyveli Lignite Corporation Ltd, - India
- Global Green Power PLC Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Makmur.PT - Indonesia
- White Energy Company Limited
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- ICICI Bank Limited - India
- Global Business Power Corporation, Philippines
- Edison Trading Spa - Italy
- Tamil Nadu electricity Board
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- Bayan Resources Tbk. - Indonesia
- Commonwealth Bank - Australia
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Attock Cement Pakistan Limited
- Mjunction Services Limited - India
- India Bulls Power Limited - India
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Kideco Jaya Agung - Indonesia
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Vizag Seaport Private Limited - India
- Mercuria Energy - Indonesia
- VISA Power Limited - India
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- Therma Luzon, Inc, Philippines
- Kobexindo Tractors - Indoneisa
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- Singapore Mercantile Exchange
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- Power Finance Corporation Ltd., India
- The State Trading Corporation of India Ltd
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- Xindia Steels Limited - India
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- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Parliament of New Zealand
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- Karbindo Abesyapradhi - Indoneisa
- Videocon Industries ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Alfred C Toepfer International GmbH - Germany
- South Luzon Thermal Energy Corporation
- Mintek Dendrill Indonesia
- Latin American Coal - Colombia
- Samtan Co., Ltd - South Korea
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Bangladesh Power Developement Board
- Sical Logistics Limited - India
- Wilmar Investment Holdings
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- Coal and Oil Company - UAE
- Sarangani Energy Corporation, Philippines
- Planning Commission, India
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- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
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- International Coal Ventures Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- Port Waratah Coal Services - Australia
- Rio Tinto Coal - Australia
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- TNB Fuel Sdn Bhd - Malaysia
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- Kumho Petrochemical, South Korea
- SMC Global Power, Philippines
- PNOC Exploration Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Petron Corporation, Philippines
- Dalmia Cement Bharat India
- Indika Energy - Indonesia
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
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- Larsen & Toubro Limited - India
- Madhucon Powers Ltd - India
- The University of Queensland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Marubeni Corporation - India
- Formosa Plastics Group - Taiwan
- Africa Commodities Group - South Africa
- European Bulk Services B.V. - Netherlands
- Timah Investasi Mineral - Indoneisa
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- Tata Chemicals Ltd - India
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- Eastern Coal Council - USA
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- Altura Mining Limited, Indonesia
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- Chamber of Mines of South Africa
- Central Electricity Authority - India
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
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- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- Indian Oil Corporation Limited
- Sinarmas Energy and Mining - Indonesia
- Economic Council, Georgia
- Ind-Barath Power Infra Limited - India
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- Riau Bara Harum - Indonesia
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Bharathi Cement Corporation - India
- Metalloyd Limited - United Kingdom
- Directorate Of Revenue Intelligence - India
- Straits Asia Resources Limited - Singapore
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- Baramulti Group, Indonesia
- Gujarat Sidhee Cement - India
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- Maheswari Brothers Coal Limited - India
- New Zealand Coal & Carbon
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Makarim & Taira - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Trasteel International SA, Italy
- Energy Development Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- Anglo American - United Kingdom
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Price Waterhouse Coopers - Russia
- Ambuja Cements Ltd - India
- McConnell Dowell - Australia
- Goldman Sachs - Singapore
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Lanco Infratech Ltd - India
- MS Steel International - UAE
- Ceylon Electricity Board - Sri Lanka
- Indian Energy Exchange, India
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- Sree Jayajothi Cements Limited - India
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Finance - Indonesia
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