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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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Thursday, 19 January 12
14TH VOGP MEETING IN HO CHI MINH CITY HANDS OUT LATEST UPDATES AND DEVELOPMENTS IN VIETNAM'S ENERGY INDUSTRY
Press Release: At upcoming 14th Vietnam Oil Gas Power on 27-28 Feb in Ho Chi Minh City the industry’s most influential names including Petrovi ...
Thursday, 19 January 12
DELTA DUNIA SEALS US$820 MIO CONTRACT INSIDER STORIES
Insider Stories reported that, PT Delta Dunia Makmur Tbk (DOID) has announced that its primary operating subsidiary, PT Bukit Makmur Mandiri Utama ( ...
Wednesday, 18 January 12
WARM WINTER ACROSS EUROPE HAS IMPACTED NEGATIVELY COAL DEMAND - BRS
With the Chinese New Year just a week away, all markets are slowing down. The drop in freight rates for all sizes has been significant over the past ...
Wednesday, 18 January 12
DRY BULK MARKET'S DRAMA CONTINUES IN START OF NEW WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A flurry of newbuilding deliveries, coupled with a slow start to the new year, a typical trend for the dry bulk market, has led the industry's benc ...
Monday, 16 January 12
BUMA MINED 2.7 MILLION TONS COAL LAST MONTH
COALspot.com - BUMA has mined 2.7 million tons (-14.1% YoY) coal last month and removed 25.8 million bcm (-5.6% YoY) overburden, according to compan ...
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- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- Bangladesh Power Developement Board
- Anglo American - United Kingdom
- Petron Corporation, Philippines
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- Borneo Indobara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- Renaissance Capital - South Africa
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- Semirara Mining and Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Merrill Lynch Commodities Europe
- Mercuria Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- Directorate Of Revenue Intelligence - India
- Siam City Cement - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Rashtriya Ispat Nigam Limited - India
- IEA Clean Coal Centre - UK
- Orica Australia Pty. Ltd.
- Dalmia Cement Bharat India
- Alfred C Toepfer International GmbH - Germany
- Essar Steel Hazira Ltd - India
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- Timah Investasi Mineral - Indoneisa
- Larsen & Toubro Limited - India
- Kideco Jaya Agung - Indonesia
- Banpu Public Company Limited - Thailand
- Global Green Power PLC Corporation, Philippines
- Malabar Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- South Luzon Thermal Energy Corporation
- Miang Besar Coal Terminal - Indonesia
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- IHS Mccloskey Coal Group - USA
- PTC India Limited - India
- MS Steel International - UAE
- The State Trading Corporation of India Ltd
- Orica Mining Services - Indonesia
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- Bharathi Cement Corporation - India
- Wilmar Investment Holdings
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Mineral Development Corp Ltd - India
- Kartika Selabumi Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- India Bulls Power Limited - India
- Economic Council, Georgia
- Kumho Petrochemical, South Korea
- Meenaskhi Energy Private Limited - India
- Tata Chemicals Ltd - India
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Bahari Cakrawala Sebuku - Indonesia
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Africa Commodities Group - South Africa
- SN Aboitiz Power Inc, Philippines
- Parliament of New Zealand
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- The Treasury - Australian Government
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- Interocean Group of Companies - India
- Cement Manufacturers Association - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Eastern Coal Council - USA
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Australian Commodity Traders Exchange
- VISA Power Limited - India
- TeaM Sual Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Agrawal Coal Company - India
- Makarim & Taira - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Baramulti Group, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Indian Oil Corporation Limited
- Central Java Power - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- GMR Energy Limited - India
- Heidelberg Cement - Germany
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Australian Coal Association
- Trasteel International SA, Italy
- PetroVietnam Power Coal Import and Supply Company
- Indo Tambangraya Megah - Indonesia
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- SMC Global Power, Philippines
- Krishnapatnam Port Company Ltd. - India
- Ministry of Mines - Canada
- Attock Cement Pakistan Limited
- Power Finance Corporation Ltd., India
- Sarangani Energy Corporation, Philippines
- Thai Mozambique Logistica
- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Indogreen Group - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Therma Luzon, Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Energy Exchange, India
- Gujarat Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Grasim Industreis Ltd - India
- Binh Thuan Hamico - Vietnam
- Standard Chartered Bank - UAE
- Globalindo Alam Lestari - Indonesia
- Mercator Lines Limited - India
- Carbofer General Trading SA - India
- Karaikal Port Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- Leighton Contractors Pty Ltd - Australia
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- Singapore Mercantile Exchange
- Aditya Birla Group - India
- Minerals Council of Australia
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- OPG Power Generation Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Marubeni Corporation - India
- Intertek Mineral Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Mintek Dendrill Indonesia
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Simpson Spence & Young - Indonesia
- Vizag Seaport Private Limited - India
- Videocon Industries ltd - India
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Meralco Power Generation, Philippines
- Coastal Gujarat Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Bhoruka Overseas - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- PNOC Exploration Corporation - Philippines
- The University of Queensland
- CNBM International Corporation - China
- New Zealand Coal & Carbon
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Xindia Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Bayan Resources Tbk. - Indonesia
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