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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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Sunday, 15 January 12
THE FREIGHT MARKET CONTINUED TO BLEED - VISTAAR
COALspot.com - "The markets continued to bleed with BDI touching almost 1000 points , almost reaching the collapse of 2008 levels," said C ...
Saturday, 14 January 12
GOLDEN MINES TO SUPPLY 4 MIO TONS - INSIDER STORIES
Insider Stories reported that, Coal miner under Sinarmas Group PT Golden Energy Mines Tbk (GEMS), a subsidiary of PT Dian Swastatika Sentosa Tbk (DS ...
Friday, 13 January 12
DIFFICULT START OF 2012 FOR DRY BULK MARKET SEEN HARD TO CHANGE IN THE COURSE OF THE YEAR, UNLESS DEMOLITION PICKS UP
The dry bulk market has been on a freefall this week after a rocky start to the new year. Yesterday, the BDI (Baltic Dry Index) the industry's benc ...
Thursday, 12 January 12
DRY BULK MARKET CRASHING AT START OF THE YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept being on freefall mode yesterday, with the industry's benchmark, the BDI (Baltic Dry Index) losing a massive 5.17% on ...
Wednesday, 11 January 12
NEWBUILDING ORDERS DECLINE, AS SHIP OWNERS REALIZE OVERSUPPLY WILL "KILL" THEM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With 2012 now underway, it will be rather interesting to see how ship owners will play the "newbuilding ordering" card to their favor, as ...
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- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- Commonwealth Bank - Australia
- Karaikal Port Pvt Ltd - India
- Bharathi Cement Corporation - India
- Altura Mining Limited, Indonesia
- Xindia Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Economic Council, Georgia
- Thai Mozambique Logistica
- Kartika Selabumi Mining - Indonesia
- Aditya Birla Group - India
- GAC Shipping (India) Pvt Ltd
- Agrawal Coal Company - India
- SMC Global Power, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Toyota Tsusho Corporation, Japan
- Miang Besar Coal Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Global Green Power PLC Corporation, Philippines
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- Gujarat Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Port Waratah Coal Services - Australia
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- Standard Chartered Bank - UAE
- Chamber of Mines of South Africa
- TeaM Sual Corporation - Philippines
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Vizag Seaport Private Limited - India
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Energy Development Corp, Philippines
- Lanco Infratech Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- South Luzon Thermal Energy Corporation
- CIMB Investment Bank - Malaysia
- Sarangani Energy Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Iligan Light & Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Trasteel International SA, Italy
- Parry Sugars Refinery, India
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Intertek Mineral Services - Indonesia
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- Latin American Coal - Colombia
- IEA Clean Coal Centre - UK
- Savvy Resources Ltd - HongKong
- Dalmia Cement Bharat India
- Sical Logistics Limited - India
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sinarmas Energy and Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Medco Energi Mining Internasional
- Australian Commodity Traders Exchange
- Ministry of Finance - Indonesia
- Star Paper Mills Limited - India
- Global Business Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement PLC, Thailand
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Power Finance Corporation Ltd., India
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- Price Waterhouse Coopers - Russia
- Mercator Lines Limited - India
- Antam Resourcindo - Indonesia
- Australian Coal Association
- Eastern Energy - Thailand
- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- ICICI Bank Limited - India
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Formosa Plastics Group - Taiwan
- Bhatia International Limited - India
- Bangladesh Power Developement Board
- OPG Power Generation Pvt Ltd - India
- Orica Mining Services - Indonesia
- Meralco Power Generation, Philippines
- Baramulti Group, Indonesia
- GVK Power & Infra Limited - India
- Coalindo Energy - Indonesia
- Anglo American - United Kingdom
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- Tata Chemicals Ltd - India
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Deloitte Consulting - India
- Coal and Oil Company - UAE
- Tamil Nadu electricity Board
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- VISA Power Limited - India
- Makarim & Taira - Indonesia
- India Bulls Power Limited - India
- Heidelberg Cement - Germany
- Attock Cement Pakistan Limited
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- Central Electricity Authority - India
- Ministry of Mines - Canada
- Manunggal Multi Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Meenaskhi Energy Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Therma Luzon, Inc, Philippines
- CNBM International Corporation - China
- Marubeni Corporation - India
- The University of Queensland
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- Mjunction Services Limited - India
- Indian Energy Exchange, India
- Madhucon Powers Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Bahari Cakrawala Sebuku - Indonesia
- Sree Jayajothi Cements Limited - India
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- Gujarat Sidhee Cement - India
- Planning Commission, India
- Banpu Public Company Limited - Thailand
- Parliament of New Zealand
- Krishnapatnam Port Company Ltd. - India
- SMG Consultants - Indonesia
- Renaissance Capital - South Africa
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- Kumho Petrochemical, South Korea
- Mintek Dendrill Indonesia
- Thiess Contractors Indonesia
- Cigading International Bulk Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- McConnell Dowell - Australia
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Petron Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Malabar Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Goldman Sachs - Singapore
- Timah Investasi Mineral - Indoneisa
- Bukit Baiduri Energy - Indonesia
- GMR Energy Limited - India
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Kobexindo Tractors - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Independent Power Producers Association of India
- Minerals Council of Australia
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