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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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Friday, 22 April 16
U.S WEEKLY DOMESTIC COAL OUTPUT UP 8.2 PER CENT - EIA
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 11.1 million short tons (mm ...
Thursday, 21 April 16
PANAMAX: A VERY HEALTHY NORTH ATLANTIC FOR BOTH ROUNDS AND FRONTHAUL
Capesize
Correcting after last week's quadrupling.
This year's highest daily average of USD 8000 came on the back of substantial pro ...
Wednesday, 20 April 16
2017 IS EXPECTED TO BE A MUCH BETTER YEAR FOR THE SHIPPING INDUSTRY - INTERMODAL
Some months ago we noted that all projections anticipated 2016 to be a better year from a macroeconomic point of view when compared to 2015. As we ...
Tuesday, 19 April 16
STARS STILL SHINING? KEY IMPORTERS THROUGH THE TELESCOPE - CLARKSONS
As the pace of growth in Chinese seaborne imports has slowed, and prospects for a return to stronger rates of expansion appear to have diminished, ...
Monday, 18 April 16
INDONESIAN 5000 GAR COAL INDEX DECLINE 1.43 PERCENT WEEK OVER WEEK - CS (I) COAL INDEX
COALspot.com: Average 5000 GAR coal index of Indonesian origin fell 1.43 percent week over week to averaging $38.65 per ton on this past Friday, ac ...
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- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- Economic Council, Georgia
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Standard Chartered Bank - UAE
- MS Steel International - UAE
- Electricity Generating Authority of Thailand
- Bhushan Steel Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Central Electricity Authority - India
- Maharashtra Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- TeaM Sual Corporation - Philippines
- Medco Energi Mining Internasional
- Makarim & Taira - Indonesia
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- Bukit Baiduri Energy - Indonesia
- Parry Sugars Refinery, India
- Planning Commission, India
- Riau Bara Harum - Indonesia
- Ministry of Mines - Canada
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- Essar Steel Hazira Ltd - India
- Sakthi Sugars Limited - India
- Toyota Tsusho Corporation, Japan
- Simpson Spence & Young - Indonesia
- The Treasury - Australian Government
- LBH Netherlands Bv - Netherlands
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- Heidelberg Cement - Germany
- Banpu Public Company Limited - Thailand
- Georgia Ports Authority, United States
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- Lanco Infratech Ltd - India
- Africa Commodities Group - South Africa
- Rashtriya Ispat Nigam Limited - India
- Cigading International Bulk Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Indika Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Thai Mozambique Logistica
- Gujarat Sidhee Cement - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Barasentosa Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- Kepco SPC Power Corporation, Philippines
- Anglo American - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- Formosa Plastics Group - Taiwan
- Wilmar Investment Holdings
- London Commodity Brokers - England
- GVK Power & Infra Limited - India
- Wood Mackenzie - Singapore
- GAC Shipping (India) Pvt Ltd
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Therma Luzon, Inc, Philippines
- CIMB Investment Bank - Malaysia
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Australian Coal Association
- Coalindo Energy - Indonesia
- Indogreen Group - Indonesia
- Jaiprakash Power Ventures ltd
- Binh Thuan Hamico - Vietnam
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Oldendorff Carriers - Singapore
- Bharathi Cement Corporation - India
- SMC Global Power, Philippines
- Salva Resources Pvt Ltd - India
- Star Paper Mills Limited - India
- Bangladesh Power Developement Board
- Minerals Council of Australia
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- South Luzon Thermal Energy Corporation
- ICICI Bank Limited - India
- Meenaskhi Energy Private Limited - India
- Sarangani Energy Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dalmia Cement Bharat India
- Manunggal Multi Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Jindal Steel & Power Ltd - India
- Mintek Dendrill Indonesia
- Vizag Seaport Private Limited - India
- VISA Power Limited - India
- Edison Trading Spa - Italy
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- TNB Fuel Sdn Bhd - Malaysia
- PNOC Exploration Corporation - Philippines
- Madhucon Powers Ltd - India
- Globalindo Alam Lestari - Indonesia
- Eastern Coal Council - USA
- Energy Link Ltd, New Zealand
- Siam City Cement PLC, Thailand
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- SMG Consultants - Indonesia
- Kobexindo Tractors - Indoneisa
- Grasim Industreis Ltd - India
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- Commonwealth Bank - Australia
- Gujarat Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- Rio Tinto Coal - Australia
- Mercator Lines Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Romanian Commodities Exchange
- Bhatia International Limited - India
- European Bulk Services B.V. - Netherlands
- Parliament of New Zealand
- Meralco Power Generation, Philippines
- Pendopo Energi Batubara - Indonesia
- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Sinarmas Energy and Mining - Indonesia
- New Zealand Coal & Carbon
- Attock Cement Pakistan Limited
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Borneo Indobara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Singapore Mercantile Exchange
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Siam City Cement - Thailand
- Mjunction Services Limited - India
- Chamber of Mines of South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Maheswari Brothers Coal Limited - India
- Savvy Resources Ltd - HongKong
- Thiess Contractors Indonesia
- Ambuja Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Baramulti Group, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Central Java Power - Indonesia
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- Aditya Birla Group - India
- Chettinad Cement Corporation Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Price Waterhouse Coopers - Russia
- Trasteel International SA, Italy
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Business Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Sree Jayajothi Cements Limited - India
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Coal and Oil Company - UAE
- Jorong Barutama Greston.PT - Indonesia
- Renaissance Capital - South Africa
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