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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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Tuesday, 31 January 12
THERE ARE MANY GOOD REASONS FOR COAL IN GERMANY - DR CIESLIK
COALspot.com - "The year 2011 was again marked by many changes on the markets and energy policies, at times in line with expectations, but at o ...
Tuesday, 31 January 12
DRY BULK MARKET KEEPS FALLING FOR WORST MONTH IN YEARS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market didn't manage to put a halt in its downfall, with the industry's benchmark, the BDI (Baltic Dry Index), posting yet another fa ...
Monday, 30 January 12
CHINA'S HUNGER FOR COAL LEAVES DENT IN PENNSYLVANIA'S SUPPLY - THOMAS LESKIN
With the price of heating oil on the rise, one of Pennsylvania's greatest natural resources - coal - is in high demand, and not just locally.
Et ...
Saturday, 28 January 12
WILL FREIGHT MARKET STABILIZE FROM NEXT WEEK?
COALspot.com - The markets continued to soften with BDI at 663 points down by 15.78 pct closing at 726 points and cape index was down by 5.73 pct cl ...
Friday, 27 January 12
DEMOLITION ACTIVITY NEEDS TO INCREASE SIGNIFICANTLY THIS YEAR AS WELL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The oversupply of vessels in most shipping sectors is so intense that it’s become clear to ship owners that unless they scrap as many of their ...
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- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Bayan Resources Tbk. - Indonesia
- Madhucon Powers Ltd - India
- McConnell Dowell - Australia
- Intertek Mineral Services - Indonesia
- Makarim & Taira - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Indian Oil Corporation Limited
- Grasim Industreis Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Pipit Mutiara Jaya. PT, Indonesia
- Tata Chemicals Ltd - India
- Vizag Seaport Private Limited - India
- Edison Trading Spa - Italy
- Bukit Makmur.PT - Indonesia
- Posco Energy - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- VISA Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Vedanta Resources Plc - India
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- Toyota Tsusho Corporation, Japan
- Ministry of Mines - Canada
- Indian Energy Exchange, India
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Leighton Contractors Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Petron Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Sojitz Corporation - Japan
- India Bulls Power Limited - India
- Orica Australia Pty. Ltd.
- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
- Latin American Coal - Colombia
- Pendopo Energi Batubara - Indonesia
- Bhushan Steel Limited - India
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- Mjunction Services Limited - India
- Therma Luzon, Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Antam Resourcindo - Indonesia
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Manunggal Multi Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Tamil Nadu electricity Board
- Baramulti Group, Indonesia
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- Georgia Ports Authority, United States
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Eastern Coal Council - USA
- MS Steel International - UAE
- Metalloyd Limited - United Kingdom
- Central Java Power - Indonesia
- Carbofer General Trading SA - India
- Aboitiz Power Corporation - Philippines
- Singapore Mercantile Exchange
- Medco Energi Mining Internasional
- Economic Council, Georgia
- Star Paper Mills Limited - India
- Uttam Galva Steels Limited - India
- Commonwealth Bank - Australia
- Jindal Steel & Power Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Cement Manufacturers Association - India
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- Kaltim Prima Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Heidelberg Cement - Germany
- Energy Development Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coalindo Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Videocon Industries ltd - India
- Parry Sugars Refinery, India
- Agrawal Coal Company - India
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- Dalmia Cement Bharat India
- Sree Jayajothi Cements Limited - India
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- South Luzon Thermal Energy Corporation
- PetroVietnam Power Coal Import and Supply Company
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jaiprakash Power Ventures ltd
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Meralco Power Generation, Philippines
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- LBH Netherlands Bv - Netherlands
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- PTC India Limited - India
- Barasentosa Lestari - Indonesia
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- Wilmar Investment Holdings
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Larsen & Toubro Limited - India
- Mintek Dendrill Indonesia
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
- Wood Mackenzie - Singapore
- Electricity Generating Authority of Thailand
- SMC Global Power, Philippines
- ASAPP Information Group - India
- Samtan Co., Ltd - South Korea
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Romanian Commodities Exchange
- London Commodity Brokers - England
- Kohat Cement Company Ltd. - Pakistan
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- Thai Mozambique Logistica
- Gujarat Sidhee Cement - India
- Planning Commission, India
- White Energy Company Limited
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- The University of Queensland
- Globalindo Alam Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Semirara Mining Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Electricity Authority, New Zealand
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- Savvy Resources Ltd - HongKong
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Minerals Council of Australia
- Global Green Power PLC Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Deloitte Consulting - India
- Aditya Birla Group - India
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Marubeni Corporation - India
- Karaikal Port Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Indo Tambangraya Megah - Indonesia
- Ministry of Finance - Indonesia
- Gujarat Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Coal and Oil Company - UAE
- Formosa Plastics Group - Taiwan
- CIMB Investment Bank - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- Standard Chartered Bank - UAE
- Neyveli Lignite Corporation Ltd, - India
- Directorate Of Revenue Intelligence - India
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