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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, 26 March 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The Baltic Dry Index follows its upward incline for fourth consecutive week by rising to more than 900 points, up by 37% from the bottom low in the ...
Monday, 26 March 12
GOLDEN MINES FY11 REVENUE JUMPS 209% - INSIDER STORIES
Insider Stories reported that, coal miner PT Golden Energy Mines Tbk (GEMS), that is controlled by Sinar Mas Group, recorded a 209% jump in revenue ...
Saturday, 24 March 12
AUSTRALIA'S MINERAL TAX : BENCHMARK FOR OTHER COUNTRIES - SUNIL K KUMBHAT
COALspot.com - Natural resources rich counties like Australia , Indonesia , South Africa , Brazil etc are going through a spectacular resources boom ...
Saturday, 24 March 12
THE AVERAGE CHARTER RATES WAS AT CAPESIZE $ 4,546 PER DAY VS SUPRAMAX / $ 10,819 PER DAY - VISTAAR
COALspot.com - The BDI crossed 900 points this week closing at 908 points up by 3.89 pct. All other sectors were up except for cape index whic ...
Thursday, 22 March 12
ECI-CHINA HANDY RATES ARE AROUND US$ 8000 - FEARNLEYS
Handy
Another positive trend was seen last week with more cargoes entering the market. Skaw-Passero/US Gulf climbed slowly up to USD 3700, while US ...
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- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- New Zealand Coal & Carbon
- White Energy Company Limited
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- Savvy Resources Ltd - HongKong
- Mintek Dendrill Indonesia
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- LBH Netherlands Bv - Netherlands
- The University of Queensland
- Georgia Ports Authority, United States
- Trasteel International SA, Italy
- Independent Power Producers Association of India
- Grasim Industreis Ltd - India
- Bukit Makmur.PT - Indonesia
- Central Electricity Authority - India
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Meralco Power Generation, Philippines
- Maheswari Brothers Coal Limited - India
- Aditya Birla Group - India
- Gujarat Sidhee Cement - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- Karbindo Abesyapradhi - Indoneisa
- Marubeni Corporation - India
- Tamil Nadu electricity Board
- ICICI Bank Limited - India
- Rio Tinto Coal - Australia
- Price Waterhouse Coopers - Russia
- Sakthi Sugars Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Interocean Group of Companies - India
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Dalmia Cement Bharat India
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Simpson Spence & Young - Indonesia
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- Bhatia International Limited - India
- Mjunction Services Limited - India
- Coal and Oil Company - UAE
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- London Commodity Brokers - England
- Directorate Of Revenue Intelligence - India
- Goldman Sachs - Singapore
- Carbofer General Trading SA - India
- VISA Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Deloitte Consulting - India
- Leighton Contractors Pty Ltd - Australia
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- Indogreen Group - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement - Thailand
- Sarangani Energy Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Riau Bara Harum - Indonesia
- Romanian Commodities Exchange
- Maharashtra Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Larsen & Toubro Limited - India
- MS Steel International - UAE
- Ministry of Mines - Canada
- Sojitz Corporation - Japan
- Parliament of New Zealand
- Global Business Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Baramulti Group, Indonesia
- Kartika Selabumi Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- PowerSource Philippines DevCo
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Transport, Egypt
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
- Neyveli Lignite Corporation Ltd, - India
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Globalindo Alam Lestari - Indonesia
- CNBM International Corporation - China
- Timah Investasi Mineral - Indoneisa
- Metalloyd Limited - United Kingdom
- Coalindo Energy - Indonesia
- Renaissance Capital - South Africa
- Borneo Indobara - Indonesia
- Electricity Authority, New Zealand
- Planning Commission, India
- Holcim Trading Pte Ltd - Singapore
- Formosa Plastics Group - Taiwan
- Mercator Lines Limited - India
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IEA Clean Coal Centre - UK
- Eastern Coal Council - USA
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Petron Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Bangladesh Power Developement Board
- Billiton Holdings Pty Ltd - Australia
- Indonesian Coal Mining Association
- Africa Commodities Group - South Africa
- Global Coal Blending Company Limited - Australia
- Kalimantan Lumbung Energi - Indonesia
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- Binh Thuan Hamico - Vietnam
- Heidelberg Cement - Germany
- Vedanta Resources Plc - India
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Eastern Energy - Thailand
- Economic Council, Georgia
- Australian Coal Association
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Kobexindo Tractors - Indoneisa
- PNOC Exploration Corporation - Philippines
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bayan Resources Tbk. - Indonesia
- McConnell Dowell - Australia
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Barasentosa Lestari - Indonesia
- Commonwealth Bank - Australia
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- Australian Commodity Traders Exchange
- Kapuas Tunggal Persada - Indonesia
- Wood Mackenzie - Singapore
- PTC India Limited - India
- Energy Development Corp, Philippines
- Intertek Mineral Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Anglo American - United Kingdom
- Indian Oil Corporation Limited
- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- Videocon Industries ltd - India
- Cement Manufacturers Association - India
- Energy Link Ltd, New Zealand
- Altura Mining Limited, Indonesia
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
- Samtan Co., Ltd - South Korea
- Sindya Power Generating Company Private Ltd
- Orica Australia Pty. Ltd.
- GAC Shipping (India) Pvt Ltd
- The State Trading Corporation of India Ltd
- AsiaOL BioFuels Corp., Philippines
- Indo Tambangraya Megah - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining Corp, Philippines
- Posco Energy - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercuria Energy - Indonesia
- Ambuja Cements Ltd - India
- Kumho Petrochemical, South Korea
- Pendopo Energi Batubara - Indonesia
- Xindia Steels Limited - India
- Attock Cement Pakistan Limited
- Bulk Trading Sa - Switzerland
- Bank of Tokyo Mitsubishi UFJ Ltd
- CIMB Investment Bank - Malaysia
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