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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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Thursday, 05 May 16
DRY BULK MARKET ON REVERSE MODE, AS HOLIDAYS AROUND THE WORLD HURT DEMAND - HELLENIC SHIPPING NEWS
The dry bulk market’s recent rally has been put on a temporary hold, as various holidays around the world have put a stop in it. In its lates ...
Wednesday, 04 May 16
COAL IMPORTS: A VOLATILE MATTER OR STILL POWERING DOWN? - CLARKSONS
Chinese coal imports decreased significantly in 2014-15, and so far in 2016 the pace of decline appears to have slowed, with imports even recording ...
Wednesday, 04 May 16
IS THE DRY BULK MARKET OUT OF THE WOODS YET, OR NOT? - HELLENIC SHIPPING NEWS
Things are beginning to brighten up in the beleaguered dry bulk market, which is riding on a multi-week rally to find itself around the “psyc ...
Wednesday, 04 May 16
POWER - WEEK: REAL EXAMPLES AND CASE STUDIES
POWER WEEK
7 - 11 November 2016, PARKROYAL on Beach Road Hotel, Singapore
www.power-week.com
Overview
Designed for the global e ...
Tuesday, 03 May 16
HOW TO AVOID THE LATEST CARGO FRAUDS - BIMCO
BIMCO receives regular reports from members around the world about cargo fraud. This week alone we have had two reports of cargoes being fixed (or ...
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- GN Power Mariveles Coal Plant, Philippines
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- Orica Australia Pty. Ltd.
- Meralco Power Generation, Philippines
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- Africa Commodities Group - South Africa
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- Indian Oil Corporation Limited
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- CIMB Investment Bank - Malaysia
- Interocean Group of Companies - India
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- Sindya Power Generating Company Private Ltd
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- Oldendorff Carriers - Singapore
- Power Finance Corporation Ltd., India
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- Eastern Energy - Thailand
- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Standard Chartered Bank - UAE
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- Parliament of New Zealand
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- Ministry of Transport, Egypt
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- Metalloyd Limited - United Kingdom
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- Minerals Council of Australia
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- Karaikal Port Pvt Ltd - India
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- Makarim & Taira - Indonesia
- India Bulls Power Limited - India
- New Zealand Coal & Carbon
- Kapuas Tunggal Persada - Indonesia
- Sojitz Corporation - Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Ministry of Finance - Indonesia
- Savvy Resources Ltd - HongKong
- Dalmia Cement Bharat India
- Ministry of Mines - Canada
- Banpu Public Company Limited - Thailand
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- GAC Shipping (India) Pvt Ltd
- Wood Mackenzie - Singapore
- Economic Council, Georgia
- ASAPP Information Group - India
- Timah Investasi Mineral - Indoneisa
- Chamber of Mines of South Africa
- Bukit Makmur.PT - Indonesia
- Merrill Lynch Commodities Europe
- Madhucon Powers Ltd - India
- Cigading International Bulk Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
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- Kumho Petrochemical, South Korea
- Formosa Plastics Group - Taiwan
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Posco Energy - South Korea
- Edison Trading Spa - Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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- SMG Consultants - Indonesia
- Thiess Contractors Indonesia
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Indika Energy - Indonesia
- PTC India Limited - India
- Petron Corporation, Philippines
- Anglo American - United Kingdom
- Maheswari Brothers Coal Limited - India
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Independent Power Producers Association of India
- Mjunction Services Limited - India
- CNBM International Corporation - China
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- Directorate General of MIneral and Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Tamil Nadu electricity Board
- Billiton Holdings Pty Ltd - Australia
- PowerSource Philippines DevCo
- Heidelberg Cement - Germany
- Indian Energy Exchange, India
- TNB Fuel Sdn Bhd - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- Coal and Oil Company - UAE
- Straits Asia Resources Limited - Singapore
- Essar Steel Hazira Ltd - India
- The University of Queensland
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Marubeni Corporation - India
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- Sree Jayajothi Cements Limited - India
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Planning Commission, India
- Asmin Koalindo Tuhup - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Intertek Mineral Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- IEA Clean Coal Centre - UK
- Bharathi Cement Corporation - India
- Rio Tinto Coal - Australia
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- Meenaskhi Energy Private Limited - India
- Carbofer General Trading SA - India
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Therma Luzon, Inc, Philippines
- Videocon Industries ltd - India
- Deloitte Consulting - India
- Binh Thuan Hamico - Vietnam
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Baramulti Group, Indonesia
- Aboitiz Power Corporation - Philippines
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- Jorong Barutama Greston.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- VISA Power Limited - India
- Medco Energi Mining Internasional
- Petrochimia International Co. Ltd.- Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
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- Directorate Of Revenue Intelligence - India
- Kartika Selabumi Mining - Indonesia
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- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
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