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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, 18 April 16
SOUTH KOREA STATE-OWNED UTILITY KOMIPO INVITES COAL BIDS FOR BORYEONG POWER PLANT
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 70,000 Metric Tons of 4,600 kcal/kg NAR coal for ...
Monday, 18 April 16
SOUTH AFRICA RB1 COAL HAS LOST GROUND IN INDIA; RB2 MAY LOSE GRIP IF THE PRICE CROSSES US$ 50 A TON - TRADERS
COALspot.com: Indian coal consumers preferred to buy South Africa RB2 coal instead of RB1 coal recent months due to RB2's low CFR price level. ...
Monday, 18 April 16
CAPESIZE INDEX ROSE 44.66 PER CENT WEEK OVER WEEK
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued to rose this week.
The freight market was ...
Friday, 15 April 16
PANAMAX MARKET CONTINUES TO FIRM - FEARNLEYS
Cape
It has been a positive freight market for the past few weeks, however, this week the market is taking a small breather, says Fearnleys in it ...
Friday, 15 April 16
U.S WEEKLY COAL OUTPUT FALLS ACROSS ALL BASINS - EIA
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 10.2 million short tons (mm ...
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- Uttam Galva Steels Limited - India
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- Africa Commodities Group - South Africa
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- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
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- European Bulk Services B.V. - Netherlands
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- Larsen & Toubro Limited - India
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- Indian Oil Corporation Limited
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- Wood Mackenzie - Singapore
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- Karbindo Abesyapradhi - Indoneisa
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- Wilmar Investment Holdings
- Bharathi Cement Corporation - India
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- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
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- Banpu Public Company Limited - Thailand
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- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- GVK Power & Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bhushan Steel Limited - India
- Central Electricity Authority - India
- PTC India Limited - India
- Chamber of Mines of South Africa
- Energy Development Corp, Philippines
- Coal and Oil Company - UAE
- Economic Council, Georgia
- Global Green Power PLC Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- The Treasury - Australian Government
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhatia International Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Coastal Gujarat Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Indian Energy Exchange, India
- Thiess Contractors Indonesia
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Kumho Petrochemical, South Korea
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- Simpson Spence & Young - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- Kaltim Prima Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- Ind-Barath Power Infra Limited - India
- Energy Link Ltd, New Zealand
- The University of Queensland
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Semirara Mining and Power Corporation, Philippines
- Australian Commodity Traders Exchange
- San Jose City I Power Corp, Philippines
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- Planning Commission, India
- Carbofer General Trading SA - India
- Bangladesh Power Developement Board
- CIMB Investment Bank - Malaysia
- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Billiton Holdings Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
- MS Steel International - UAE
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Romanian Commodities Exchange
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- Lanco Infratech Ltd - India
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- SMC Global Power, Philippines
- Binh Thuan Hamico - Vietnam
- Ministry of Transport, Egypt
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- Parry Sugars Refinery, India
- McConnell Dowell - Australia
- Independent Power Producers Association of India
- Miang Besar Coal Terminal - Indonesia
- Interocean Group of Companies - India
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- LBH Netherlands Bv - Netherlands
- Ministry of Finance - Indonesia
- Ambuja Cements Ltd - India
- Orica Australia Pty. Ltd.
- Antam Resourcindo - Indonesia
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- Chettinad Cement Corporation Ltd - India
- Kartika Selabumi Mining - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate General of MIneral and Coal - Indonesia
- Mintek Dendrill Indonesia
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- Medco Energi Mining Internasional
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- Australian Coal Association
- Goldman Sachs - Singapore
- Siam City Cement - Thailand
- Siam City Cement PLC, Thailand
- Eastern Energy - Thailand
- Tata Chemicals Ltd - India
- ASAPP Information Group - India
- Borneo Indobara - Indonesia
- Attock Cement Pakistan Limited
- SN Aboitiz Power Inc, Philippines
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Eastern Coal Council - USA
- Bulk Trading Sa - Switzerland
- Standard Chartered Bank - UAE
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Singapore Mercantile Exchange
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Dalmia Cement Bharat India
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- Port Waratah Coal Services - Australia
- Bukit Baiduri Energy - Indonesia
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Authority, New Zealand
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Marubeni Corporation - India
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- Rio Tinto Coal - Australia
- Indika Energy - Indonesia
- Parliament of New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Electricity Generating Authority of Thailand
- Therma Luzon, Inc, Philippines
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