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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, 28 April 16
PRICES OF POWER-STATION COAL IN INDONESIA IS INCREASING
COALspot.com: Inquiries for Indonesian 4200 - 4400 Kcal/kg GAR thermal coal cargoes from India suddenly increase recent days.
A Jakarta-based ...
Thursday, 28 April 16
KOMIPO TO IMPORT 710K MT OF BITUMINOUS COAL DURING JULY - SEPTEMBER 2016
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 710,000 Metric Tons of Bituminous Coal for its B ...
Thursday, 28 April 16
CAPE: BIT MORE OPTIMISM IN THE MARKET; SUPRAMAX: FORWARD CURVE IS FALLING - FEARNLEYS
Cape
A bit of a slower week. Activity level has dropped, though the rates do still remain firm, says Fearnleys in its latest weekly report.
...
Wednesday, 27 April 16
THE OCEAN SHIPPING EXPERIENCED DRAMATIC VOLATILITY IN THE BEGINNING OF 2016 - PANOS TSILINGIRIS
Shipping’s new (ab)normal
The global economy and ocean shipping experienced dramatic volatility in the beginning of 2016 and as the glob ...
Wednesday, 27 April 16
INDONESIAN COAL MINER KIDECO REPORTED NET PROFIT OF US$138.1 MILLION IN 2015
COALspot.com: Kideco Jaya Agung, one of the Indonesia's leading coal miners has reported net profit of US$138.1 million on revenue of US$1.65 b ...
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- Essar Steel Hazira Ltd - India
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- Mintek Dendrill Indonesia
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- Trasteel International SA, Italy
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- Planning Commission, India
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- Singapore Mercantile Exchange
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- The University of Queensland
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- Indian Oil Corporation Limited
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- PowerSource Philippines DevCo
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- Savvy Resources Ltd - HongKong
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- Larsen & Toubro Limited - India
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Intertek Mineral Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Altura Mining Limited, Indonesia
- Vedanta Resources Plc - India
- Wood Mackenzie - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
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- Power Finance Corporation Ltd., India
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- VISA Power Limited - India
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- Medco Energi Mining Internasional
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- Grasim Industreis Ltd - India
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- Orica Mining Services - Indonesia
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- European Bulk Services B.V. - Netherlands
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- Simpson Spence & Young - Indonesia
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- San Jose City I Power Corp, Philippines
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- Australian Coal Association
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- Sojitz Corporation - Japan
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- Therma Luzon, Inc, Philippines
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- LBH Netherlands Bv - Netherlands
- Thai Mozambique Logistica
- Mercator Lines Limited - India
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- PTC India Limited - India
- Deloitte Consulting - India
- CNBM International Corporation - China
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- London Commodity Brokers - England
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Ambuja Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- Minerals Council of Australia
- Leighton Contractors Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Riau Bara Harum - Indonesia
- Energy Development Corp, Philippines
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Uttam Galva Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Xindia Steels Limited - India
- MS Steel International - UAE
- Bhoruka Overseas - Indonesia
- Bukit Makmur.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- SMC Global Power, Philippines
- Indika Energy - Indonesia
- Cement Manufacturers Association - India
- Gujarat Sidhee Cement - India
- Independent Power Producers Association of India
- Kobexindo Tractors - Indoneisa
- Latin American Coal - Colombia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Lanco Infratech Ltd - India
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- Antam Resourcindo - Indonesia
- SMG Consultants - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Mineral Development Corp Ltd - India
- Petron Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Siam City Cement - Thailand
- Parry Sugars Refinery, India
- Chamber of Mines of South Africa
- Coastal Gujarat Power Limited - India
- Romanian Commodities Exchange
- Bulk Trading Sa - Switzerland
- Oldendorff Carriers - Singapore
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Pipit Mutiara Jaya. PT, Indonesia
- Salva Resources Pvt Ltd - India
- Africa Commodities Group - South Africa
- Jaiprakash Power Ventures ltd
- GAC Shipping (India) Pvt Ltd
- Timah Investasi Mineral - Indoneisa
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Bukit Baiduri Energy - Indonesia
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- White Energy Company Limited
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