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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, 04 May 12
DEMOLITION KEY FOR DRY BULK MARKET RECOVERY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The overflow of newbuilding vessels which “spilled over” into 2012 from 2011 brought the dry bulk market to a near collapse level at the ...
Thursday, 03 May 12
DRY BULK MARKET REMAINS INACTIVE, POSTING MILD DECREASE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept retreating this week, although at a very low pace, on the back of a lull in demand. The industry's benchmark, th ...
Thursday, 03 May 12
MINERS DEMAND LEGAL CERTAINTY ON PRE-BAN INTERIM POLICY - THE JAKARTA POST
The Jakarta Post reported that, Mining companies represented by the Indonesian Mining Association (IMA) welcomed the government’s plan to impo ...
Thursday, 03 May 12
HANDY EAST COAST INDIA - CHINA AROUND USD 7000 - FEARNLEYS AS
Handy - Stable demand in the Atlantic offered good rates for the tonnage.
USG/Cont was worth USD 17500 and more. Baltic and Black Sea appeared to ...
Wednesday, 02 May 12
CHINA BLACKOUTS HIGHLIGHT PRICING POLICY WEAKNESS - FITCH
Fitch reported that, the likelihood of further electricity blackouts in China this summer underlines Fitch's view of the basic problem f ...
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- Iligan Light & Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Deloitte Consulting - India
- Grasim Industreis Ltd - India
- New Zealand Coal & Carbon
- PetroVietnam Power Coal Import and Supply Company
- Timah Investasi Mineral - Indoneisa
- Metalloyd Limited - United Kingdom
- London Commodity Brokers - England
- Gujarat Electricity Regulatory Commission - India
- Economic Council, Georgia
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- TNB Fuel Sdn Bhd - Malaysia
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- India Bulls Power Limited - India
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Malabar Cements Ltd - India
- PTC India Limited - India
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Siam City Cement PLC, Thailand
- Simpson Spence & Young - Indonesia
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Sarangani Energy Corporation, Philippines
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- South Luzon Thermal Energy Corporation
- Ministry of Mines - Canada
- Kepco SPC Power Corporation, Philippines
- Energy Development Corp, Philippines
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- Jindal Steel & Power Ltd - India
- Siam City Cement - Thailand
- Videocon Industries ltd - India
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- Heidelberg Cement - Germany
- Meralco Power Generation, Philippines
- Indo Tambangraya Megah - Indonesia
- Aboitiz Power Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
- Savvy Resources Ltd - HongKong
- Trasteel International SA, Italy
- Cement Manufacturers Association - India
- Kalimantan Lumbung Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- Uttam Galva Steels Limited - India
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- PowerSource Philippines DevCo
- Aditya Birla Group - India
- Oldendorff Carriers - Singapore
- Borneo Indobara - Indonesia
- Singapore Mercantile Exchange
- Ministry of Finance - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Eastern Coal Council - USA
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- Intertek Mineral Services - Indonesia
- The University of Queensland
- Meenaskhi Energy Private Limited - India
- Samtan Co., Ltd - South Korea
- Kartika Selabumi Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Parliament of New Zealand
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Attock Cement Pakistan Limited
- Semirara Mining Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Commonwealth Bank - Australia
- The State Trading Corporation of India Ltd
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- Star Paper Mills Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Central Java Power - Indonesia
- The Treasury - Australian Government
- Indian Energy Exchange, India
- CNBM International Corporation - China
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- Marubeni Corporation - India
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
- Price Waterhouse Coopers - Russia
- Anglo American - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Pipit Mutiara Jaya. PT, Indonesia
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Barasentosa Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Parry Sugars Refinery, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coal and Oil Company - UAE
- Cigading International Bulk Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Binh Thuan Hamico - Vietnam
- Edison Trading Spa - Italy
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- Global Business Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Lanco Infratech Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- McConnell Dowell - Australia
- Sojitz Corporation - Japan
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- Mintek Dendrill Indonesia
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- VISA Power Limited - India
- Indika Energy - Indonesia
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- Ministry of Transport, Egypt
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Pendopo Energi Batubara - Indonesia
- Essar Steel Hazira Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Bayan Resources Tbk. - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Toyota Tsusho Corporation, Japan
- Global Green Power PLC Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Tamil Nadu electricity Board
- Bhushan Steel Limited - India
- GMR Energy Limited - India
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Vedanta Resources Plc - India
- Petron Corporation, Philippines
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Indogreen Group - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- OPG Power Generation Pvt Ltd - India
- Indian Oil Corporation Limited
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- Thai Mozambique Logistica
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Standard Chartered Bank - UAE
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- Wood Mackenzie - Singapore
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