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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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Wednesday, 14 March 12
GLOBAL THERMAL TRADE FLOW CHANGES WILL ENSURE SECURITY OF THERMAL COAL SUPPLY, ALBEIT AT A HIGH PRICE - WOOD MACKENZIE
Wood Mackenzie Says Global Thermal Trade Flow Changes Will Ensure Security of Thermal Coal Supply, Albeit At a High Price Seaborne thermal demand by ...
Wednesday, 14 March 12
COKAL TAKES ANOTHER STEP IN DEVELOPING INFRASTRUCTURE TO FACILITATE METALLURGICAL COAL PRODUCTION
Global coal group, Cokal Limited (ASX-CKA), has signed Memorandums of Understanding (MoU’s) to develop two river ports and two small scale coa ...
Tuesday, 13 March 12
CLARIFICATION OF GR 24 OF 2012 REQUIRING DIVESTMENT OF FOREIGN OWNERSHIP OVER TIME
ASX Announcement
Global metallurgical coal group, Cokal Limited (ASX-CKA), is responding to the recent announcement of the Indonesian Ministry of ...
Tuesday, 13 March 12
EUROPEAN COAL CONTANGO: FURTHER STEEPNESS REQUIRED TO MAKE LARGE SCALE PHYSICAL TIME SPREAD ARBITRAGE MORE ATTRACTIVE - MISWIN MAHESH, BARCLAYS CAPITAL
COALspot.com - "With the contango between the Y+1 and M+1 ARA delivered contract now averaging above the $14/t level, there is an increasing in ...
Monday, 12 March 12
DELTA DUNIA 1M OVERBURDEN DROPS 3.1% - INSIDER STORIES
Insider Stories reported that, Indonesia's second largest coal mining contractor PT Delta Dunia Makmur Tbk (DOID) reported a 25 million bank ...
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- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- GVK Power & Infra Limited - India
- The University of Queensland
- Economic Council, Georgia
- Sindya Power Generating Company Private Ltd
- India Bulls Power Limited - India
- Medco Energi Mining Internasional
- The State Trading Corporation of India Ltd
- Straits Asia Resources Limited - Singapore
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Madhucon Powers Ltd - India
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Mintek Dendrill Indonesia
- Holcim Trading Pte Ltd - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Binh Thuan Hamico - Vietnam
- ASAPP Information Group - India
- Baramulti Group, Indonesia
- Tamil Nadu electricity Board
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- Edison Trading Spa - Italy
- Savvy Resources Ltd - HongKong
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- Tata Chemicals Ltd - India
- PNOC Exploration Corporation - Philippines
- Georgia Ports Authority, United States
- Bulk Trading Sa - Switzerland
- Riau Bara Harum - Indonesia
- Toyota Tsusho Corporation, Japan
- Bayan Resources Tbk. - Indonesia
- Parry Sugars Refinery, India
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining Corp, Philippines
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- Mercuria Energy - Indonesia
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Energy Exchange, India
- Rio Tinto Coal - Australia
- PTC India Limited - India
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- Borneo Indobara - Indonesia
- South Luzon Thermal Energy Corporation
- Eastern Energy - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Bhatia International Limited - India
- Thiess Contractors Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Meenaskhi Energy Private Limited - India
- Larsen & Toubro Limited - India
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Australian Coal Association
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- GMR Energy Limited - India
- Gujarat Sidhee Cement - India
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Oldendorff Carriers - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Makarim & Taira - Indonesia
- Carbofer General Trading SA - India
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- Posco Energy - South Korea
- Wood Mackenzie - Singapore
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Miang Besar Coal Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Attock Cement Pakistan Limited
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- SMC Global Power, Philippines
- TeaM Sual Corporation - Philippines
- Wilmar Investment Holdings
- Iligan Light & Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Electricity Authority, New Zealand
- Pendopo Energi Batubara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- Australian Commodity Traders Exchange
- SN Aboitiz Power Inc, Philippines
- Meralco Power Generation, Philippines
- Siam City Cement PLC, Thailand
- Directorate General of MIneral and Coal - Indonesia
- Bhoruka Overseas - Indonesia
- San Jose City I Power Corp, Philippines
- Mercator Lines Limited - India
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- Interocean Group of Companies - India
- Bukit Makmur.PT - Indonesia
- Dalmia Cement Bharat India
- Price Waterhouse Coopers - Russia
- International Coal Ventures Pvt Ltd - India
- Latin American Coal - Colombia
- MS Steel International - UAE
- Indika Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- Ministry of Finance - Indonesia
- Timah Investasi Mineral - Indoneisa
- Petron Corporation, Philippines
- Deloitte Consulting - India
- Standard Chartered Bank - UAE
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Altura Mining Limited, Indonesia
- CIMB Investment Bank - Malaysia
- Minerals Council of Australia
- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Africa Commodities Group - South Africa
- Sakthi Sugars Limited - India
- Malabar Cements Ltd - India
- White Energy Company Limited
- Xindia Steels Limited - India
- Formosa Plastics Group - Taiwan
- Directorate Of Revenue Intelligence - India
- Ministry of Mines - Canada
- Kepco SPC Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Global Coal Blending Company Limited - Australia
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- CNBM International Corporation - China
- London Commodity Brokers - England
- Global Business Power Corporation, Philippines
- Indian Oil Corporation Limited
- Jorong Barutama Greston.PT - Indonesia
- Romanian Commodities Exchange
- Therma Luzon, Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Parliament of New Zealand
- Kobexindo Tractors - Indoneisa
- Vizag Seaport Private Limited - India
- PowerSource Philippines DevCo
- Thai Mozambique Logistica
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- Sree Jayajothi Cements Limited - India
- Heidelberg Cement - Germany
- Antam Resourcindo - Indonesia
- Ambuja Cements Ltd - India
- Marubeni Corporation - India
- Orica Mining Services - Indonesia
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