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Tuesday, 18 February 20
WEEKLY MARKET ANALYSIS - ALLIED
 Under such poorly performing market circumstances, many usually take the historical approach, in order to better understand and further analyze the present state of the market. However, to what degree is this a "fair" comparison to undertake right now?
According to Thomas Chasapis, Research Analyst of Allied Shipping Research the freight collapse of 2016 in the dry bulk sector has been a reference case for every discussion when the market has undergone any severe downward pressure. However, despite its excessive impact, it was a "known" situation, or to put it more bluntly, it was 'an accident waiting to happen'.
Thomas Chasapis further noted that, the excess tonnage capacity was the result of the massive new order activity that had taken place in years prior, as well as, the disconnected relationship of demand and supply fundamentals, eventually pushing freight earnings to their perceived absolute bottom. After that, the market started to adapt to this new market reality, with more modest orderbook activity and, for a time, massive scrapping activity. This "rebalancing" phase helped translate over to a 2-year period of ever-improving freight market conditions (with some minor corrections here and there), coupled by a more stable market with lower volatility. Suddenly though, from the later part of 2018 the picture was promptly altered. This high-risk environment is not something new for the shipping industry, nor are the periodical exaggerations and asymmetries in realized earnings.
However, Thomas Chasapis, said in his latest research report, having experienced a series of single shock events in such a short period of time, it comes naturally to question the robustness of the different business models. Tail risks and “black swans", won’t be just catch phrases, but a change in investment attitude while we enter a new "era" of how we quantify different kinds of market risks (and their likelihood of being fulfilled).
According to Allied, the COVID-19 outbreak has disrupted most business activities worldwide, with the possible outcomes being numerous and presenting multiple decision directions to practitioners. In other words, we are in a genuine situation, where an absolute comparison to previously noted similar excessive negative pressures would be, to say the least, misleading. Prior to the beginning of this year, the discussion revolved around the potential of a two-tier market unfolding, depending on what type of fuel each vessel would burn. As it turns out and from all that has transpired, we may be experiencing a multi-tier freight market. The Pacific market is in sharp negative territory in terms of earnings, while in the Atlantic, things are relatively more promising (even if not particularly good). Moreover, especially for scrubbers-fitted units, freight rates are following a completely different orbit than what is presented by the quoted Baltic freight indices. The asymmetrical freight market is one of the many bizarre things happening right now. With a certain time-lag, asset prices are likely to follow this steep downward correction (this has not fully materialized yet). With the market in disarray, where uncertainty is the prevailing sentiment, the mispricing of different asset classes is the obvious outcome. The bargain attitude, as well as, the short-term unpredictable outlook has created an excessive "bid-ask spread", indicating a market in distress, unable to properly price both the future risks and trends involved. 2020 has already shown to be a challenging year. Even with a very weak short-term outlook, the market may well absorb most of the negative side effects and eventually return to an upward track much sooner than many expect.
Despite this however, the longer-term macroeconomic trends are still troubling. China is already facing the possibility of losing around 0.5% points from its projected growth for this year, something that would translate over to a significant step back in global seaborne trade, Thomas Chasapis concluded.
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Tuesday, 18 February 20
CORONAVIRUS AND ITS IMPACT ON YOUR CONTRACT - CAN YOU RELY ON 'FORCE MAJEURE'? - INCE
KNOWLEDGE TO ELEVATE
On 30 January 2020, the World Health Organization (WHO) declared that the outbreak of the Novel Coronavirus (officially t ...
Monday, 17 February 20
IMO-2020 SULPHUR CAP - ISSUES TO CONSIDER PRIOR TO THE IMPLEMENTATION OF THE CARRIAGE BAN ON 1 MARCH 2020 - STANDARD CLUB
With the IMO 2020 global sulphur cap now in force, members should bear in mind another significant date in relation to the ‘carriage ban&rsqu ...
Monday, 17 February 20
COVID-19: THE EFFECT OF THIS PUBLIC HEALTH EMERGENCY ON CHARTERPARTY TERMS - GARD
KNOWLEDGE TO ELEVATE
Is it useful to compare the COVID-19 with earlier disease outbreaks?
A comparison with the Ebola outbreak ...
Saturday, 15 February 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - REUTERS
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Saturday, 15 February 20
CHEN ZHIDA: NOVEL CORONAVIRUS - IMPLICATIONS FOR CHARTERPARTIES - SHIPOWNERS' CLUB
KNOWLEDGE TO ELEVATE
Last month, the Club issued a bulletin on the 2019 Novel Coronavirus (COVID-19) which explained the origin of the virus a ...
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- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Coalindo Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Eastern Coal Council - USA
- Parry Sugars Refinery, India
- Therma Luzon, Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- Chettinad Cement Corporation Ltd - India
- Parliament of New Zealand
- Ministry of Finance - Indonesia
- Indogreen Group - Indonesia
- MS Steel International - UAE
- Kobexindo Tractors - Indoneisa
- ICICI Bank Limited - India
- TeaM Sual Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Central Electricity Authority - India
- Africa Commodities Group - South Africa
- Romanian Commodities Exchange
- Mercuria Energy - Indonesia
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- Cement Manufacturers Association - India
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- Thiess Contractors Indonesia
- Bangladesh Power Developement Board
- Salva Resources Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Ind-Barath Power Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Bhushan Steel Limited - India
- Madhucon Powers Ltd - India
- London Commodity Brokers - England
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Oil Corporation Limited
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- Riau Bara Harum - Indonesia
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- CNBM International Corporation - China
- Indian Energy Exchange, India
- San Jose City I Power Corp, Philippines
- Ministry of Transport, Egypt
- Indo Tambangraya Megah - Indonesia
- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- Mercator Lines Limited - India
- AsiaOL BioFuels Corp., Philippines
- Ceylon Electricity Board - Sri Lanka
- Electricity Authority, New Zealand
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- SN Aboitiz Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Planning Commission, India
- Bukit Asam (Persero) Tbk - Indonesia
- Anglo American - United Kingdom
- Aditya Birla Group - India
- Edison Trading Spa - Italy
- PetroVietnam Power Coal Import and Supply Company
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- Offshore Bulk Terminal Pte Ltd, Singapore
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- Toyota Tsusho Corporation, Japan
- Meralco Power Generation, Philippines
- IHS Mccloskey Coal Group - USA
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- Xindia Steels Limited - India
- PowerSource Philippines DevCo
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- CIMB Investment Bank - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Simpson Spence & Young - Indonesia
- Banpu Public Company Limited - Thailand
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Singapore Mercantile Exchange
- New Zealand Coal & Carbon
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- India Bulls Power Limited - India
- Minerals Council of Australia
- Bayan Resources Tbk. - Indonesia
- Independent Power Producers Association of India
- Siam City Cement - Thailand
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Latin American Coal - Colombia
- Energy Development Corp, Philippines
- Tamil Nadu electricity Board
- Bahari Cakrawala Sebuku - Indonesia
- Makarim & Taira - Indonesia
- GVK Power & Infra Limited - India
- Merrill Lynch Commodities Europe
- Orica Australia Pty. Ltd.
- Jindal Steel & Power Ltd - India
- Orica Mining Services - Indonesia
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Bukit Baiduri Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Coal and Oil Company - UAE
- Krishnapatnam Port Company Ltd. - India
- The Treasury - Australian Government
- Sical Logistics Limited - India
- Wilmar Investment Holdings
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- Eastern Energy - Thailand
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Holcim Trading Pte Ltd - Singapore
- Kideco Jaya Agung - Indonesia
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- Semirara Mining and Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Energy Link Ltd, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- The University of Queensland
- Global Coal Blending Company Limited - Australia
- Borneo Indobara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Dalmia Cement Bharat India
- Barasentosa Lestari - Indonesia
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Indika Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Metalloyd Limited - United Kingdom
- International Coal Ventures Pvt Ltd - India
- PTC India Limited - India
- Bulk Trading Sa - Switzerland
- Rashtriya Ispat Nigam Limited - India
- Medco Energi Mining Internasional
- Intertek Mineral Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- SMC Global Power, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Trasteel International SA, Italy
- Deloitte Consulting - India
- Ministry of Mines - Canada
- Gujarat Mineral Development Corp Ltd - India
- White Energy Company Limited
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- Georgia Ports Authority, United States
- Port Waratah Coal Services - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
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