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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, 10 February 12
TONNAGE KEEPS ON COMING - DREWRY
Drewry Maritime Research’s latest edition of its Dry Bulk Forecaster pulls no punches in its assessment of a market that looks certain to cont ...
Friday, 10 February 12
GIVE PERMIT POWERS TO GOVERNORS: MINERS - THE JAKARTA POST
The Jakarta Post reported that, following clashes between mining companies and local residents, the Indonesian Mining Association (IMA) wants to tra ...
Thursday, 09 February 12
AUSTRALIA'S EPIC TO ACQUIRE 15,500 HA COAL EXPLORATION LICENCES IN EAST KALIMANTAN, INDONESIA
COALspot.com - Epic Resources Limited to acquire two coal concessions in Kutai Barat regency, East Kalimantan, Indonesia.
According to company's ...
Thursday, 09 February 12
RESOURCE ALAM BUYS 28,521HA CONCESSIONS - INSIDER STORIES
Insider Stories reported that, PT Resource Alam Indonesia Tbk (KKGI), owned by Adijanto family, today announced acquisition of 75% interest in PT Ka ...
Tuesday, 07 February 12
DRY BULK MARKET FINALLY STOPS DECLINE, POSTS FIRST RISE IN MORE THAN A MONTH - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
After falling to near record lows, not seen since the mid-80s the dry bulk market has finally stopped its path to "hell", with the industr ...
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- Mintek Dendrill Indonesia
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- Alfred C Toepfer International GmbH - Germany
- Parliament of New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Generating Authority of Thailand
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karbindo Abesyapradhi - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Mercator Lines Limited - India
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- Ambuja Cements Ltd - India
- Deloitte Consulting - India
- GAC Shipping (India) Pvt Ltd
- Ministry of Transport, Egypt
- Mercuria Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Attock Cement Pakistan Limited
- Globalindo Alam Lestari - Indonesia
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- Interocean Group of Companies - India
- Bhatia International Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Dalmia Cement Bharat India
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Mining Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- New Zealand Coal & Carbon
- White Energy Company Limited
- Coastal Gujarat Power Limited - India
- Xindia Steels Limited - India
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- LBH Netherlands Bv - Netherlands
- Global Green Power PLC Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Sinarmas Energy and Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Makmur.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Energy Development Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Tamil Nadu electricity Board
- Orica Australia Pty. Ltd.
- GVK Power & Infra Limited - India
- Minerals Council of Australia
- Petrochimia International Co. Ltd.- Taiwan
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Videocon Industries ltd - India
- Coalindo Energy - Indonesia
- Indian Energy Exchange, India
- Metalloyd Limited - United Kingdom
- TeaM Sual Corporation - Philippines
- Posco Energy - South Korea
- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Krishnapatnam Port Company Ltd. - India
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- Simpson Spence & Young - Indonesia
- Riau Bara Harum - Indonesia
- Carbofer General Trading SA - India
- Holcim Trading Pte Ltd - Singapore
- Baramulti Group, Indonesia
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Manunggal Multi Energi - Indonesia
- Heidelberg Cement - Germany
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- Bharathi Cement Corporation - India
- Merrill Lynch Commodities Europe
- Indo Tambangraya Megah - Indonesia
- Meenaskhi Energy Private Limited - India
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Marubeni Corporation - India
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- Wood Mackenzie - Singapore
- Makarim & Taira - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- VISA Power Limited - India
- The Treasury - Australian Government
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- Aditya Birla Group - India
- Siam City Cement - Thailand
- Trasteel International SA, Italy
- India Bulls Power Limited - India
- Altura Mining Limited, Indonesia
- Bayan Resources Tbk. - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Sojitz Corporation - Japan
- Asmin Koalindo Tuhup - Indonesia
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Economic Council, Georgia
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- Aboitiz Power Corporation - Philippines
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- ASAPP Information Group - India
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- Sree Jayajothi Cements Limited - India
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- San Jose City I Power Corp, Philippines
- Sakthi Sugars Limited - India
- Banpu Public Company Limited - Thailand
- Kideco Jaya Agung - Indonesia
- Intertek Mineral Services - Indonesia
- Madhucon Powers Ltd - India
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Indika Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- Medco Energi Mining Internasional
- McConnell Dowell - Australia
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- Cigading International Bulk Terminal - Indonesia
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Borneo Indobara - Indonesia
- Planning Commission, India
- Wilmar Investment Holdings
- Jindal Steel & Power Ltd - India
- Independent Power Producers Association of India
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- Kartika Selabumi Mining - Indonesia
- Goldman Sachs - Singapore
- Salva Resources Pvt Ltd - India
- Bangladesh Power Developement Board
- Central Electricity Authority - India
- Australian Coal Association
- Kapuas Tunggal Persada - Indonesia
- Meralco Power Generation, Philippines
- Anglo American - United Kingdom
- Star Paper Mills Limited - India
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- London Commodity Brokers - England
- Gujarat Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Offshore Bulk Terminal Pte Ltd, Singapore
- Latin American Coal - Colombia
- Renaissance Capital - South Africa
- Electricity Authority, New Zealand
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Pendopo Energi Batubara - Indonesia
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
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