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Friday, 06 April 12
DRY BULK MARKET SWIFT TO HALT FALL ON RENEWED DEMAND FOR CAPESIZES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 The dry bulk managed to put a stop to the recent falls, which came as a result of a lacklustre demand for smaller vessel sizes. Although this trend has remained the same, the return of Chinese charterers from their three-day holidays marked a stronger demand for Capesizes yesterday, which in turn was enough to offset the lack of interest for smaller vessels and lead the market to higher ground. The Baltic Dry Index (BDI) was up by 0..22% to 928 points yesterday, with Capesizes gaining 2.17% on the day and reaching 1,507 points. By contrast, the demise of the Supramax market was again evident, with the relative index losing 1.66%, while Panamaxes were also down by 0.67%.
Detailing the oversupply issues which have caused the dry bulk market to retreat to such low levels since the start of the year, Intermodal’s Theodore Ntalakos said that “the freight market and other circumstances were quite convenient for many shipowners who while acting independently and rationally consulting their own self-interest, ordered new buildings even when it was clear that in the long-term the excessive tonnage would eventually suffocate the freight market. It is a real-life example of game theory that shows why two or more individuals might not cooperate, even if it is in their best interest to do so” said Mr. Ntalakos.
He went on to give an example to make his case. “Say we have one shipowner ( Shipowner A) and all the rest shipowners (Shipowner B). Each of their strategy is either to expand by ordering the new fuel efficient vessels or not to order and buy a vessel from the second hand market. We have four possible scenarios:
I. If Shipowner A orders and no one else does then he will get the benefit of new designs, and earn say $10, B stays behind and earns $1
II. If both A and B order then they lose the advantage and they earn very little - $2,
III. If no one orders then they earn moderately from their existing fleet - $5 each, and
IV. If shipowner A does not order but 'B' orders then 'A' will earn very little because the charterers will prefer B's ECO ships – A earns $1, B earns $10.
Here, regardless of what the other decides, each shipowner gets a higher pay-off by ordering new vessels:
I. If B does not order, the payoffs for A are $5 or $10 so he will always chose $10 i.e to order.
II. If B orders, the payoffs for A are $1 or $2 so he will always chose $2 i.e to order
The game is symmetric so Shipower B would always act the same way which means that both shipowers would order new vessels. Since both rational owners decide to order new vessels each receives a lower reward than if both were not to order!! So, rational decision-making results being worse off than if each chose not to order and accept to earn less. As the two shipowners can’t see what the others are doing and cannot play a cooperative game, they will decide to maximize their pay-off and always proceed with orders” said Mr. Ntalakos in a rather interesting undertaking.
He concluded his analysis by stating “we need however to point out that the new ECO ships especially with the current restrain on finance, will only be a small part of the total fleet and orderbook and it will take years to play a substantial part and drive the older vessels out of the market, so we expect owners who order such vessels with today's new builiding and bunker prices to have the competitive advantage for the years to come.
So, there you have it, Shipping is a non-cooperative game. Then why do pools exist? Even in pools if each member's interest to put the next (and succeeding) vessel he acquires into the pool and the demand is limited then the quality of the common is damaged for everybody. So like everything else in life one needs to find the proper equilibrium between cooperating and looking after one's self-interest” he said.
Source: Nikos Roussanoglou, Hellenic Shipping
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Sunday, 17 June 12
S7 & S8 ROUTES ARE LIKELY TO BE SOFT NEXT WEEK - VISTAAR
COALspot.com - The BDI gained some increase after continues fall for several weeks.
The BDI increased by 47 points (up by 5.36 pct) closing at 92 ...
Saturday, 16 June 12
INDONESIAN SUB-BITUMINOUS COAL & CFR SOUTH CHINA COAL CONTRACT SWAPS ARE UNDER PRESSURE
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for July deliveries seems to be under pressure this week.&nbs ...
Friday, 15 June 12
CAPESIZE - THE LEVELS THAT DID FIX ARE DOWN W-O-W LEVELS - FEARNLEYS
Handy
Another slow-moving market with rates hovering at same level as last week. US Gulf positions fixed USD 25,000 for trips to Cont/Passero and S ...
Thursday, 14 June 12
SMALLER DRY BULK CARRIERS LIKELY TO FACE MORE CHALLENGES; DEMOLITION ACTIVITY SET FOR RECORD YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest update on the dry bulk markets, BIMCO said that China is partly “failing to deliver” on raw material imports that can affe ...
Wednesday, 13 June 12
LOW COAL PRICES COULD CHANGE SUPPLY SIDE DYNAMICS - FITCH RATINGS
Fitch Ratings believes that the weakness seen in thermal coal prices in recent months should reverse once demand from major importers recovers, alth ...
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- Miang Besar Coal Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Sree Jayajothi Cements Limited - India
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- GAC Shipping (India) Pvt Ltd
- Eastern Coal Council - USA
- Makarim & Taira - Indonesia
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- VISA Power Limited - India
- White Energy Company Limited
- Kalimantan Lumbung Energi - Indonesia
- The Treasury - Australian Government
- Kohat Cement Company Ltd. - Pakistan
- GVK Power & Infra Limited - India
- Vedanta Resources Plc - India
- Savvy Resources Ltd - HongKong
- Rashtriya Ispat Nigam Limited - India
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Power Finance Corporation Ltd., India
- San Jose City I Power Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- Leighton Contractors Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Coal and Oil Company - UAE
- IEA Clean Coal Centre - UK
- PTC India Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- Rio Tinto Coal - Australia
- Siam City Cement PLC, Thailand
- Toyota Tsusho Corporation, Japan
- Indika Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Banpu Public Company Limited - Thailand
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- Uttam Galva Steels Limited - India
- Economic Council, Georgia
- Thai Mozambique Logistica
- Central Java Power - Indonesia
- Aditya Birla Group - India
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- Parry Sugars Refinery, India
- Pendopo Energi Batubara - Indonesia
- Chamber of Mines of South Africa
- Manunggal Multi Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Sindya Power Generating Company Private Ltd
- Tata Chemicals Ltd - India
- Vizag Seaport Private Limited - India
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Anglo American - United Kingdom
- Cement Manufacturers Association - India
- International Coal Ventures Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Ministry of Transport, Egypt
- Deloitte Consulting - India
- PNOC Exploration Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Merrill Lynch Commodities Europe
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Sojitz Corporation - Japan
- Sarangani Energy Corporation, Philippines
- Bangladesh Power Developement Board
- TNB Fuel Sdn Bhd - Malaysia
- South Luzon Thermal Energy Corporation
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Petron Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- Jaiprakash Power Ventures ltd
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GMR Energy Limited - India
- SMC Global Power, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Offshore Bulk Terminal Pte Ltd, Singapore
- SN Aboitiz Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Jindal Steel & Power Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Altura Mining Limited, Indonesia
- Siam City Cement - Thailand
- Aboitiz Power Corporation - Philippines
- Edison Trading Spa - Italy
- Coalindo Energy - Indonesia
- Larsen & Toubro Limited - India
- Interocean Group of Companies - India
- Global Business Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Kaltim Prima Coal - Indonesia
- Australian Commodity Traders Exchange
- Formosa Plastics Group - Taiwan
- Directorate Of Revenue Intelligence - India
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Mercuria Energy - Indonesia
- Indian Oil Corporation Limited
- Videocon Industries ltd - India
- Electricity Generating Authority of Thailand
- Trasteel International SA, Italy
- Ministry of Finance - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Lanco Infratech Ltd - India
- Thiess Contractors Indonesia
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- MS Steel International - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Maharashtra Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Karaikal Port Pvt Ltd - India
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- Sical Logistics Limited - India
- Madhucon Powers Ltd - India
- Parliament of New Zealand
- Heidelberg Cement - Germany
- Bulk Trading Sa - Switzerland
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Attock Cement Pakistan Limited
- Bukit Baiduri Energy - Indonesia
- Standard Chartered Bank - UAE
- Romanian Commodities Exchange
- Bhatia International Limited - India
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- ASAPP Information Group - India
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- Planning Commission, India
- Kumho Petrochemical, South Korea
- Posco Energy - South Korea
- Goldman Sachs - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Indo Tambangraya Megah - Indonesia
- Wood Mackenzie - Singapore
- Timah Investasi Mineral - Indoneisa
- Energy Development Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- Tamil Nadu electricity Board
- Georgia Ports Authority, United States
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Coastal Gujarat Power Limited - India
- Baramulti Group, Indonesia
- Agrawal Coal Company - India
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
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