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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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Monday, 02 April 12
BANGLADESH EYEING INDONESIA FOR COAL
COALspot.com - The high level executives of Center for Environmental and Geographic Information Services (CEGIS) of Bangladesh is visiting Ind ...
Monday, 02 April 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The first quarter of the New Year ended with the BDI standing 42% above from the 26 years’ bottom low of 662 points on February 1st, and a pos ...
Saturday, 31 March 12
THE BDI CONTINUED TO MOVE UPWARD - VISTAAR
COALspot.com - The BDI continued to move upward and rose by 2.86 pct closing at 934 points.
The cape index was up by 3.14 pct closing at 1,412 po ...
Saturday, 31 March 12
SRI LANKA IMPORTS 152,555 MT OF INDONESIAN COAL IN FEBRUARY
COALspot.com: Indonesia, the world largest coal exporter, shipped 27.126* million tons of coal in February 2012, compared to 28.21* million to ...
Friday, 30 March 12
RECOND NUMBERS SURROUNDING THE SUPRAMAX DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Last year proved to be both a record year in the number of deliveries of dry bulkers between 40,000dwt and 64,000dwt, as well as a record year in th ...
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- Electricity Generating Authority of Thailand
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- Standard Chartered Bank - UAE
- Meralco Power Generation, Philippines
- Mercuria Energy - Indonesia
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- Global Green Power PLC Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Coalindo Energy - Indonesia
- ASAPP Information Group - India
- Parliament of New Zealand
- Videocon Industries ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Therma Luzon, Inc, Philippines
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sakthi Sugars Limited - India
- South Luzon Thermal Energy Corporation
- Energy Development Corp, Philippines
- The Treasury - Australian Government
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Sree Jayajothi Cements Limited - India
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- Energy Link Ltd, New Zealand
- Kaltim Prima Coal - Indonesia
- Mjunction Services Limited - India
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Uttam Galva Steels Limited - India
- Intertek Mineral Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Leighton Contractors Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Indika Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- Global Business Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Maheswari Brothers Coal Limited - India
- Petron Corporation, Philippines
- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
- Agrawal Coal Company - India
- Indogreen Group - Indonesia
- Kobexindo Tractors - Indoneisa
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- Antam Resourcindo - Indonesia
- Alfred C Toepfer International GmbH - Germany
- PowerSource Philippines DevCo
- The State Trading Corporation of India Ltd
- Global Coal Blending Company Limited - Australia
- GAC Shipping (India) Pvt Ltd
- Semirara Mining and Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Power Finance Corporation Ltd., India
- Jindal Steel & Power Ltd - India
- Lanco Infratech Ltd - India
- India Bulls Power Limited - India
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Jaiprakash Power Ventures ltd
- Binh Thuan Hamico - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Star Paper Mills Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Commonwealth Bank - Australia
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- Thai Mozambique Logistica
- Iligan Light & Power Inc, Philippines
- Thiess Contractors Indonesia
- European Bulk Services B.V. - Netherlands
- GVK Power & Infra Limited - India
- Ambuja Cements Ltd - India
- Eastern Energy - Thailand
- Medco Energi Mining Internasional
- Kohat Cement Company Ltd. - Pakistan
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Romanian Commodities Exchange
- Attock Cement Pakistan Limited
- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- Indian Oil Corporation Limited
- Pipit Mutiara Jaya. PT, Indonesia
- VISA Power Limited - India
- New Zealand Coal & Carbon
- Africa Commodities Group - South Africa
- Deloitte Consulting - India
- SMG Consultants - Indonesia
- Baramulti Group, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Planning Commission, India
- Carbofer General Trading SA - India
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Bangladesh Power Developement Board
- Vizag Seaport Private Limited - India
- CIMB Investment Bank - Malaysia
- Singapore Mercantile Exchange
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Australian Coal Association
- Borneo Indobara - Indonesia
- Banpu Public Company Limited - Thailand
- Metalloyd Limited - United Kingdom
- Ind-Barath Power Infra Limited - India
- Economic Council, Georgia
- Coastal Gujarat Power Limited - India
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- Aboitiz Power Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Rio Tinto Coal - Australia
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Bulk Trading Sa - Switzerland
- San Jose City I Power Corp, Philippines
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- Oldendorff Carriers - Singapore
- PTC India Limited - India
- Kideco Jaya Agung - Indonesia
- Manunggal Multi Energi - Indonesia
- Siam City Cement - Thailand
- Indonesian Coal Mining Association
- Eastern Coal Council - USA
- Vijayanagar Sugar Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Barasentosa Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Latin American Coal - Colombia
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- International Coal Ventures Pvt Ltd - India
- Edison Trading Spa - Italy
- Holcim Trading Pte Ltd - Singapore
- Vedanta Resources Plc - India
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- Ministry of Transport, Egypt
- Ceylon Electricity Board - Sri Lanka
- Cement Manufacturers Association - India
- Price Waterhouse Coopers - Russia
- London Commodity Brokers - England
- Chamber of Mines of South Africa
- Central Java Power - Indonesia
- Kartika Selabumi Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- White Energy Company Limited
- Bhatia International Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Heidelberg Cement - Germany
- LBH Netherlands Bv - Netherlands
- SN Aboitiz Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Mines - Canada
- Sinarmas Energy and Mining - Indonesia
- Tamil Nadu electricity Board
- The University of Queensland
- Orica Australia Pty. Ltd.
- SMC Global Power, Philippines
- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
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