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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, 13 February 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The current sentiment in the dry market resembles memories from the end of 2008, when the Baltic Dry Index closed at the level of 663 points on Dece ...
Sunday, 12 February 12
INDONESIA HAS ISSUED A REGULATION TO BAN THE EXPORT OF UNPROCESSED MINERALS AND METALS BY 2014
COALspot.com - The Indonesian government has finally issued a ministerial decree (7 Year 2012 dated 6 February 2012) to ban the export of unpro ...
Sunday, 12 February 12
THE BALTIC DRY INDEX CLIMBS 10.51%
COALspot.com - "The markets touched record lows not seen since mid 80’s. However there was some good news with signs of market recovery a ...
Saturday, 11 February 12
A SNAPSHOT ON THE ECONOMIC AND SHIPPING ENVIRONMENT - GOLDEN DESTINY
The week was highlighted with intense worries in the eurozone for Greece to secure its second bailout of $130billion by applying a ...
Saturday, 11 February 12
WILL HISTORY REPEAT ITSELF IN THIS SHIPPING CYCLE? - CLARKSONS / HELLENIC SHIPPING
A slightly dubious "best man" joke runs as follows… Best man (giving his wedding speech): "Have you noticed how history repeat ...
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- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- Madhucon Powers Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- PNOC Exploration Corporation - Philippines
- CNBM International Corporation - China
- Electricity Authority, New Zealand
- GVK Power & Infra Limited - India
- Agrawal Coal Company - India
- Romanian Commodities Exchange
- Bulk Trading Sa - Switzerland
- ASAPP Information Group - India
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- Parliament of New Zealand
- Kobexindo Tractors - Indoneisa
- Banpu Public Company Limited - Thailand
- Indonesian Coal Mining Association
- Bangladesh Power Developement Board
- Gujarat Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Simpson Spence & Young - Indonesia
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- Singapore Mercantile Exchange
- Borneo Indobara - Indonesia
- Kaltim Prima Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Wood Mackenzie - Singapore
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Kepco SPC Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- Indo Tambangraya Megah - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Alfred C Toepfer International GmbH - Germany
- MS Steel International - UAE
- SN Aboitiz Power Inc, Philippines
- Tamil Nadu electricity Board
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- McConnell Dowell - Australia
- Deloitte Consulting - India
- Energy Link Ltd, New Zealand
- Mercator Lines Limited - India
- Maheswari Brothers Coal Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Globalindo Alam Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- Port Waratah Coal Services - Australia
- Latin American Coal - Colombia
- Kalimantan Lumbung Energi - Indonesia
- Posco Energy - South Korea
- CIMB Investment Bank - Malaysia
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- The State Trading Corporation of India Ltd
- Straits Asia Resources Limited - Singapore
- Rio Tinto Coal - Australia
- Jorong Barutama Greston.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- Energy Development Corp, Philippines
- Coal and Oil Company - UAE
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- Jindal Steel & Power Ltd - India
- Indian Oil Corporation Limited
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- London Commodity Brokers - England
- Directorate Of Revenue Intelligence - India
- Global Green Power PLC Corporation, Philippines
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- Marubeni Corporation - India
- Aboitiz Power Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Iligan Light & Power Inc, Philippines
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
- Orica Australia Pty. Ltd.
- Karaikal Port Pvt Ltd - India
- Baramulti Group, Indonesia
- Global Coal Blending Company Limited - Australia
- Malabar Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- Larsen & Toubro Limited - India
- Australian Coal Association
- Holcim Trading Pte Ltd - Singapore
- San Jose City I Power Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Medco Energi Mining Internasional
- Ambuja Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Sical Logistics Limited - India
- Krishnapatnam Port Company Ltd. - India
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- Vizag Seaport Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Oldendorff Carriers - Singapore
- Coalindo Energy - Indonesia
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- TeaM Sual Corporation - Philippines
- Planning Commission, India
- Interocean Group of Companies - India
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- The University of Queensland
- Rashtriya Ispat Nigam Limited - India
- Indika Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Binh Thuan Hamico - Vietnam
- Salva Resources Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Edison Trading Spa - Italy
- Central Electricity Authority - India
- Parry Sugars Refinery, India
- Sakthi Sugars Limited - India
- Bayan Resources Tbk. - Indonesia
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- Metalloyd Limited - United Kingdom
- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- Barasentosa Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- Vedanta Resources Plc - India
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sarangani Energy Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- VISA Power Limited - India
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- The Treasury - Australian Government
- Economic Council, Georgia
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- LBH Netherlands Bv - Netherlands
- Bhatia International Limited - India
- New Zealand Coal & Carbon
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bharathi Cement Corporation - India
- Sree Jayajothi Cements Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Minerals Council of Australia
- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- IEA Clean Coal Centre - UK
- Ceylon Electricity Board - Sri Lanka
- Price Waterhouse Coopers - Russia
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- Tata Chemicals Ltd - India
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Global Business Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
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