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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, 02 May 16
INDIA'S GANGAVARAM PORT SETS ALL INDIA RECORD FOR NON-COKING COAL DISCHARGE
COALspot.com: Gangavaram Port, the deepest and the most modern port in India, has created yet another historical milestone record by discharging 15 ...
Monday, 02 May 16
CS (I) 5000 GAR COAL INDEX CLOSES 0.11% HIGHER, 5700 GAR COAL RISES 0.07% W/W
COALspot.com: Average 5000 GAR coal index of Indonesian origin up 0.28 percent week over week to averaging $38.78 per ton on this past Friday, acco ...
Monday, 02 May 16
FREIGHT RATES ARE EXPECTED TO BE FLAT TO SOFT THIS WEEK
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued to rose this week.
The freight market was ...
Saturday, 30 April 16
40 YEARS OF HANDLING COAL AT THE BTW IN WILHELMSHAVEN UNDER THE RHENUS FLAG
Press Release: The first bulk carrier with coal on board docked at the Bulk Terminal Wilhelmshaven (BTW), which is operated by Rhenus Midgar ...
Friday, 29 April 16
U.S. COAL IMPORTS IN Q4' 15 DECLINED TO 2.7 MMST FROM 3 MMST IN Q3' 15
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 10.3 million short tons (mm ...
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- Semirara Mining Corp, Philippines
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- New Zealand Coal & Carbon
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- IEA Clean Coal Centre - UK
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- Global Business Power Corporation, Philippines
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- Australian Coal Association
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- International Coal Ventures Pvt Ltd - India
- Baramulti Group, Indonesia
- Coastal Gujarat Power Limited - India
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- PTC India Limited - India
- Thiess Contractors Indonesia
- Coalindo Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Orica Australia Pty. Ltd.
- Siam City Cement - Thailand
- Independent Power Producers Association of India
- Sical Logistics Limited - India
- Agrawal Coal Company - India
- Bhoruka Overseas - Indonesia
- Merrill Lynch Commodities Europe
- Posco Energy - South Korea
- Globalindo Alam Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- Thai Mozambique Logistica
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- Bulk Trading Sa - Switzerland
- Interocean Group of Companies - India
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- Indian Energy Exchange, India
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Sojitz Corporation - Japan
- Mjunction Services Limited - India
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- GMR Energy Limited - India
- Gujarat Sidhee Cement - India
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- Power Finance Corporation Ltd., India
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- Africa Commodities Group - South Africa
- SMG Consultants - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- Bharathi Cement Corporation - India
- Economic Council, Georgia
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- Billiton Holdings Pty Ltd - Australia
- Xindia Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- Petrochimia International Co. Ltd.- Taiwan
- Indika Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
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- Indo Tambangraya Megah - Indonesia
- Standard Chartered Bank - UAE
- Essar Steel Hazira Ltd - India
- The University of Queensland
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- Australian Commodity Traders Exchange
- Makarim & Taira - Indonesia
- Meralco Power Generation, Philippines
- Indogreen Group - Indonesia
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- ICICI Bank Limited - India
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- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Barasentosa Lestari - Indonesia
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Altura Mining Limited, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Tamil Nadu electricity Board
- Edison Trading Spa - Italy
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- Coal and Oil Company - UAE
- Antam Resourcindo - Indonesia
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- Planning Commission, India
- Gujarat Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Mining Services - Indonesia
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- Bangladesh Power Developement Board
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Sarangani Energy Corporation, Philippines
- Chamber of Mines of South Africa
- GVK Power & Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Banpu Public Company Limited - Thailand
- AsiaOL BioFuels Corp., Philippines
- Parry Sugars Refinery, India
- Chettinad Cement Corporation Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sinarmas Energy and Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Intertek Mineral Services - Indonesia
- Mercuria Energy - Indonesia
- Indonesian Coal Mining Association
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
- Deloitte Consulting - India
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Ministry of Transport, Egypt
- Alfred C Toepfer International GmbH - Germany
- Renaissance Capital - South Africa
- Jaiprakash Power Ventures ltd
- Salva Resources Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Miang Besar Coal Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- CIMB Investment Bank - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- Kaltim Prima Coal - Indonesia
- ASAPP Information Group - India
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- Timah Investasi Mineral - Indoneisa
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