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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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Friday, 01 June 12
COKAL ACCEPTED ON THE CLEAN AND CLEAR LIST FOR ITS BORNEO BARA PRIMA AND BUMI BARITO MINERAL PROJECTS
- Borneo Bara Prima (BBP) Project confirmed on the Clean and Clear List 9th May 2012
- Bumi Barito Mineral (BBM) Project confirmed on the Clean and ...
Friday, 01 June 12
ADARO BUYS MAJORITY STAKE IN AFFILIATED BHAKTI ENERGI - INSIDER STORIES
Insider Stories reported that, PT Adaro Energy Tbk entered into an option to provide a convertible loan of up to US$500 million for a period of 3 ye ...
Thursday, 31 May 12
DRY BULK MARKET UNABLE TO FIND NEW SUPPORT TO REACH HIGHER LEVELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has been unable to find new support and recover to higher levels during these past few days. As a result, the Baltic Dry Index ( ...
Wednesday, 30 May 12
ORPHEUS RAISES $2.24M TO ADVANCE INDONESIAN COAL PRODUCTION ASSETS
• $2.24 million raised from a placement to new and existing institutional and sophisticated investors from Australia and overseas
• Funds ...
Wednesday, 30 May 12
ARPENI SECURES TRANSSHIPMENT CONTRACT FROM BARUNA DIRGA
Insider Stories reported that, shipping operator PT Arpeni Pratama Ocean Line Tbk (APOL) has secured a 1-year coal transhipment contract of 4 millio ...
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- Georgia Ports Authority, United States
- Krishnapatnam Port Company Ltd. - India
- Grasim Industreis Ltd - India
- Straits Asia Resources Limited - Singapore
- Kobexindo Tractors - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Planning Commission, India
- Attock Cement Pakistan Limited
- The University of Queensland
- Gujarat Mineral Development Corp Ltd - India
- Tata Chemicals Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- IEA Clean Coal Centre - UK
- Minerals Council of Australia
- Anglo American - United Kingdom
- Wood Mackenzie - Singapore
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Meenaskhi Energy Private Limited - India
- MS Steel International - UAE
- Riau Bara Harum - Indonesia
- San Jose City I Power Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- PTC India Limited - India
- Bulk Trading Sa - Switzerland
- Neyveli Lignite Corporation Ltd, - India
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- Banpu Public Company Limited - Thailand
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- Simpson Spence & Young - Indonesia
- Parliament of New Zealand
- Port Waratah Coal Services - Australia
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- Sojitz Corporation - Japan
- Larsen & Toubro Limited - India
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- Edison Trading Spa - Italy
- ASAPP Information Group - India
- Meralco Power Generation, Philippines
- Goldman Sachs - Singapore
- Power Finance Corporation Ltd., India
- Malabar Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Gujarat Sidhee Cement - India
- Rio Tinto Coal - Australia
- Central Java Power - Indonesia
- LBH Netherlands Bv - Netherlands
- McConnell Dowell - Australia
- OPG Power Generation Pvt Ltd - India
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- Aditya Birla Group - India
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Lanco Infratech Ltd - India
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- GVK Power & Infra Limited - India
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- Medco Energi Mining Internasional
- Semirara Mining and Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Electricity Generating Authority of Thailand
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- Thiess Contractors Indonesia
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- IHS Mccloskey Coal Group - USA
- Ministry of Mines - Canada
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- ICICI Bank Limited - India
- Alfred C Toepfer International GmbH - Germany
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- Singapore Mercantile Exchange
- Cement Manufacturers Association - India
- VISA Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Manunggal Multi Energi - Indonesia
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Billiton Holdings Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Trasteel International SA, Italy
- Borneo Indobara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Ministry of Transport, Egypt
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- PNOC Exploration Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- Commonwealth Bank - Australia
- Agrawal Coal Company - India
- Savvy Resources Ltd - HongKong
- Chettinad Cement Corporation Ltd - India
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- Indika Energy - Indonesia
- Videocon Industries ltd - India
- Bhatia International Limited - India
- Mjunction Services Limited - India
- SMC Global Power, Philippines
- Oldendorff Carriers - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- Global Business Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Xindia Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Petron Corporation, Philippines
- Uttam Galva Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Development Corp, Philippines
- South Luzon Thermal Energy Corporation
- Leighton Contractors Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Parry Sugars Refinery, India
- Kartika Selabumi Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- CNBM International Corporation - China
- SN Aboitiz Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Indonesian Coal Mining Association
- Latin American Coal - Colombia
- Asmin Koalindo Tuhup - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- Altura Mining Limited, Indonesia
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- Samtan Co., Ltd - South Korea
- Miang Besar Coal Terminal - Indonesia
- Indian Oil Corporation Limited
- Coal and Oil Company - UAE
- Indogreen Group - Indonesia
- Deloitte Consulting - India
- Economic Council, Georgia
- Kumho Petrochemical, South Korea
- Thai Mozambique Logistica
- Bhoruka Overseas - Indonesia
- Sinarmas Energy and Mining - Indonesia
- SMG Consultants - Indonesia
- Toyota Tsusho Corporation, Japan
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