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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, 14 April 16
AUSTRALIAN MINING SERVICES SECTOR SQUEEZED BY MINERS' COST CUTS - FITCH RATINGS
Fitch Ratings says mining services companies' revenues and margins will remain under pressure as miners continue to focus on reducing costs ami ...
Thursday, 14 April 16
DRY BULKERS' PRICES COULD BE HEADING UPWARDS AS BUYERS' APPETITE INCREASES - HELLENIC SHIPPING NEWS
Investment sentiment is beginning to trend upwards in the market for second hand dry bulk carriers. According to the latest weekly report from ship ...
Wednesday, 13 April 16
U.S COAL PRODUCTION IS EXPECTED TO DECREASE BY 16 PER CENT IN 2016; THE LARGEST ANNUAL PERCENTAGE DECLINE SINCE 1958 - EIA
EIA estimates that U.S. coal production in March 2016 was 52 million short tons (MMst), a 2 MMst (4%) decrease from the previous month and 29 MMst ...
Tuesday, 12 April 16
INDONESIA COAL BENCHMARK PRICE INCREASES FOR SECOND STRAIGHT MONTH
COALspot.com: The Indonesia Coal Benchmark Price Increases For Second Straight Month in April 2016.
The Director General of Mine ...
Tuesday, 12 April 16
NO FURTHER SIGNIFICANT COAL PRICE DECLINES IN THE FUTURE - FITCH
COALspot.com: Fitch does not expect further significant coal price declines because producers sector-wide are suffering losses while China and Indo ...
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- PowerSource Philippines DevCo
- Minerals Council of Australia
- Bukit Makmur.PT - Indonesia
- Global Business Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Energy Development Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Posco Energy - South Korea
- Merrill Lynch Commodities Europe
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Port Waratah Coal Services - Australia
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Kartika Selabumi Mining - Indonesia
- Agrawal Coal Company - India
- Borneo Indobara - Indonesia
- Indika Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- TeaM Sual Corporation - Philippines
- New Zealand Coal & Carbon
- Deloitte Consulting - India
- Bhatia International Limited - India
- International Coal Ventures Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- Aboitiz Power Corporation - Philippines
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- Mintek Dendrill Indonesia
- Lanco Infratech Ltd - India
- Medco Energi Mining Internasional
- Australian Coal Association
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- Globalindo Alam Lestari - Indonesia
- Eastern Energy - Thailand
- Standard Chartered Bank - UAE
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Indo Tambangraya Megah - Indonesia
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- San Jose City I Power Corp, Philippines
- South Luzon Thermal Energy Corporation
- Holcim Trading Pte Ltd - Singapore
- McConnell Dowell - Australia
- London Commodity Brokers - England
- Videocon Industries ltd - India
- GMR Energy Limited - India
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- Sojitz Corporation - Japan
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- Power Finance Corporation Ltd., India
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- Kepco SPC Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coal and Oil Company - UAE
- Trasteel International SA, Italy
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- Riau Bara Harum - Indonesia
- Mercuria Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Australian Commodity Traders Exchange
- Toyota Tsusho Corporation, Japan
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Karaikal Port Pvt Ltd - India
- Malabar Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- Ceylon Electricity Board - Sri Lanka
- CIMB Investment Bank - Malaysia
- Iligan Light & Power Inc, Philippines
- SMC Global Power, Philippines
- Binh Thuan Hamico - Vietnam
- India Bulls Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Madhucon Powers Ltd - India
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- Parliament of New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Leighton Contractors Pty Ltd - Australia
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- Indogreen Group - Indonesia
- Economic Council, Georgia
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- Meralco Power Generation, Philippines
- CNBM International Corporation - China
- Ambuja Cements Ltd - India
- Africa Commodities Group - South Africa
- Straits Asia Resources Limited - Singapore
- Mercator Lines Limited - India
- Timah Investasi Mineral - Indoneisa
- Goldman Sachs - Singapore
- Planning Commission, India
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- Gujarat Sidhee Cement - India
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Central Java Power - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sical Logistics Limited - India
- Samtan Co., Ltd - South Korea
- The University of Queensland
- Wilmar Investment Holdings
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- Interocean Group of Companies - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
- Indonesian Coal Mining Association
- Singapore Mercantile Exchange
- Directorate General of MIneral and Coal - Indonesia
- Chamber of Mines of South Africa
- Barasentosa Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Bulk Trading Sa - Switzerland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thai Mozambique Logistica
- Salva Resources Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Indian Energy Exchange, India
- Sindya Power Generating Company Private Ltd
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Latin American Coal - Colombia
- Bukit Baiduri Energy - Indonesia
- Wood Mackenzie - Singapore
- Formosa Plastics Group - Taiwan
- Sree Jayajothi Cements Limited - India
- Indian Oil Corporation Limited
- Ministry of Transport, Egypt
- Asmin Koalindo Tuhup - Indonesia
- LBH Netherlands Bv - Netherlands
- Tamil Nadu electricity Board
- ASAPP Information Group - India
- Siam City Cement - Thailand
- Bhoruka Overseas - Indonesia
- MS Steel International - UAE
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- Coalindo Energy - Indonesia
- Parry Sugars Refinery, India
- Gujarat Mineral Development Corp Ltd - India
- PNOC Exploration Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Simpson Spence & Young - Indonesia
- Independent Power Producers Association of India
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- Renaissance Capital - South Africa
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- PTC India Limited - India
- Kumho Petrochemical, South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Siam City Cement PLC, Thailand
- Global Green Power PLC Corporation, Philippines
- White Energy Company Limited
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- Attock Cement Pakistan Limited
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bhushan Steel Limited - India
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