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Tuesday, 01 October 13
DRY BULK MARKET POISED FOR RETREAT ON CHINA HOLIDAY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The start of a national weeklong in China as of Tuesday is expected to put a lid in the latest rally of the dry bulk freight market, as has always been the case in similar occasions. This trend has already been obvious, by tracking the latest couple of sessions of the industry's benchmark, the Baltic Dry Index. The BDI was down 43 points yesterday, to end at 2,003 points, still more than double than the level of this past summer. The Capesize market witnessed the widest losses, which again was to be expected, given that most of the Capesize business is coming out of China. The BCI (Baltic Capesize Index) was down by 114 points to 3,853. Marginal losses were again obvious in the Panamax market, while smaller ship classes fared better, with Supramaxes rising by 10 points and Handysizes by three points to 1,079 and 597 respectively.
Capt. Jitesh Jaipuriyar, Chief Operating officer with Emerald Maritime, Dubai, offered Hellenic Shipping News Worldwide (www.hellenicshippingnews.com) an insight, regarding this latest rally of the dry bulk market, which has been fuelled by factors both "upstream" and "downstream". In the upstream factors, Capt. Jaipuriyar, noted that "miners are not able to sell at higher costs as there are few “takers”. India and China, as one of the most prospective import economies, are unable to support high raw material prices due to currency devaluation and slow growth combined. However, a miner may not be able to feed supply at the same cost for long as it threatens the very survival. Thus, the importer is forced to pay for high raw material prices which eventually is directly correlated to BDI upswing and supports the rally", he stated.
Regarding downstream factors, Capt. said that "in the current scenario, any increase in prices of raw materials, shall force miners to pass on the rises to the end users, in order to maintain profit margins, especially if this trend continues for an extended period. For shipping to recover, then this period has to be extended. Does it mean that it would bring “Inflationary pressure” in emerging economies? Not necessary. This is because when pressure builds up on downstream, other “balancing factors” shall come into play" he says.
According to Capt. Jaipuriyar, at this stage "the following question arises, if the high raw materials cost shall be able to create a “derived demand” or not. What we see as of now may not be real derived demand but more of a “Pseudo Demand”. Pseudo demand emerges from the constraint of choices a company has when having contracted out spot rates. This will show increased demand through paying more for shipping of the materials. However, the fact remains that companies have to commit to long term contracts (LTCs) and soaring period rates would not allow them to contract ships at lesser Time-Charter equivalents. But LTCs can play ‘Wait and watch’ game. This again contributes to pool of “pseudo demand” to be capitalized later and would support the rally", he says.
BULLWHIP EFFECT & “DECOUPLING”
"Last month, A Capesize stem from Australia to China, cost USD 14 per MT whereas same when slit in two panamaxes, costs only USD 13 per MT. This is against the economy of scale. So, how does it happen? When the demand goes up, a producer goes for bigger volumes and Capes rate go high. Due to limited Capes, the demand for smaller sizes down the chain increases which in effect creates a ‘Bullwhip effect’ to drive the demand for ships and rallies BDI overall.
So, at some point of time, the economic principles “decouple” with existing demand and supply scenario and lead to speculations. This in turn brings in volatility in the market. But the end demand drives it in sustainable way in spite of creation of multiple peaks and troughs on the way.
ROAD AHEAD
There have been many attempts to forecast BDIs in past and will continued to be explored. However, interestingly, it appears that the accuracy of forecasts lies not in “correlation” but possible “negative correlations”. It is for the fact that a positive correlation is not mere a result of one factor but a combination of many. Under such circumstances, it may not be possible to substantiate a proper or perfect “weightage” to one factor or another. But, past shows that gold, CRB (Commodity research bureau index) and crude prices often indicate how the negative correlation is building up and may help forecast BDI for short runs, possibly.
Overall, market remains upbeat for positive growth as stockpiles of grains and coal and other major commodities remain high to be shipped across the geographies", he concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Sunday, 10 November 13
PANAMAX COAL FREIGHT RATES REMAIN UNDER PRESSURE; SUPRAMAX BIGGEST GAINER - REDDY
COALspot.com: The freight market was up this week with all indices increased except for Panamax index.
The BDI was up by 56 points closing at 158 ...
Friday, 08 November 13
DRY BULK MARKET BOUNCES BACK ON RENEWED DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market staged a mild comeback this week, as the industry's benchmark, the Baltic Dry Index (BDI) inched forward step by step and bit b ...
Friday, 08 November 13
US'S OCTOBER COAL PRODUCTION INCREASED BY 1.78% M-M - EIA
COALspot.com – United States the world’s second largest coal producer, produced approximately 19.3 million short tons (mmst) of coal in ...
Thursday, 07 November 13
FORMOSA PLASTICS SEEKS 80K MT OF 5850 GAR COAL
COALspot.com: Taiwan's Formosa Plastics Group is inviting bids for 80,000 mt of bituminous coal for delivery in Nov - Dec'13 for its Chi ...
Thursday, 07 November 13
INDONESIAN COAL EXPORT VOLUME INCREASED; REVENUE DECREASED
COALspot.com: Indonesia, the 15th largest economy, 4th largest coal producer in the world and world's largest multi grade coal exporter shipp ...
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- Kohat Cement Company Ltd. - Pakistan
- Xindia Steels Limited - India
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- Rashtriya Ispat Nigam Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Edison Trading Spa - Italy
- IEA Clean Coal Centre - UK
- GAC Shipping (India) Pvt Ltd
- The State Trading Corporation of India Ltd
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Savvy Resources Ltd - HongKong
- Africa Commodities Group - South Africa
- Indika Energy - Indonesia
- Semirara Mining Corp, Philippines
- Bhushan Steel Limited - India
- Kartika Selabumi Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Oldendorff Carriers - Singapore
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- Star Paper Mills Limited - India
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- IHS Mccloskey Coal Group - USA
- Billiton Holdings Pty Ltd - Australia
- Central Electricity Authority - India
- PTC India Limited - India
- Jaiprakash Power Ventures ltd
- Indonesian Coal Mining Association
- Manunggal Multi Energi - Indonesia
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- PNOC Exploration Corporation - Philippines
- The University of Queensland
- Kideco Jaya Agung - Indonesia
- Barasentosa Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Sakthi Sugars Limited - India
- International Coal Ventures Pvt Ltd - India
- Tamil Nadu electricity Board
- Mjunction Services Limited - India
- Price Waterhouse Coopers - Russia
- Renaissance Capital - South Africa
- SMG Consultants - Indonesia
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
- Singapore Mercantile Exchange
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Sinarmas Energy and Mining - Indonesia
- India Bulls Power Limited - India
- Toyota Tsusho Corporation, Japan
- Eastern Energy - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- Carbofer General Trading SA - India
- CNBM International Corporation - China
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- Independent Power Producers Association of India
- Bharathi Cement Corporation - India
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Intertek Mineral Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Iligan Light & Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Chamber of Mines of South Africa
- Sarangani Energy Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Australian Coal Association
- CIMB Investment Bank - Malaysia
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Makarim & Taira - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- Eastern Coal Council - USA
- Merrill Lynch Commodities Europe
- Jindal Steel & Power Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jorong Barutama Greston.PT - Indonesia
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- Rio Tinto Coal - Australia
- Cement Manufacturers Association - India
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- Ministry of Transport, Egypt
- Thai Mozambique Logistica
- Interocean Group of Companies - India
- Bukit Asam (Persero) Tbk - Indonesia
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- Gujarat Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Chettinad Cement Corporation Ltd - India
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- London Commodity Brokers - England
- Kepco SPC Power Corporation, Philippines
- Medco Energi Mining Internasional
- Ministry of Mines - Canada
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- Therma Luzon, Inc, Philippines
- Vedanta Resources Plc - India
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- Grasim Industreis Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Videocon Industries ltd - India
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Sojitz Corporation - Japan
- Malabar Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Latin American Coal - Colombia
- Kobexindo Tractors - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Heidelberg Cement - Germany
- Leighton Contractors Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Altura Mining Limited, Indonesia
- Coastal Gujarat Power Limited - India
- Ind-Barath Power Infra Limited - India
- Straits Asia Resources Limited - Singapore
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement - Thailand
- Goldman Sachs - Singapore
- MS Steel International - UAE
- Petron Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- ICICI Bank Limited - India
- Coalindo Energy - Indonesia
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Mercuria Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- PowerSource Philippines DevCo
- Directorate Of Revenue Intelligence - India
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
- Economic Council, Georgia
- Australian Commodity Traders Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Posco Energy - South Korea
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Ambuja Cements Ltd - India
- Indogreen Group - Indonesia
- Bukit Makmur.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Aditya Birla Group - India
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Port Waratah Coal Services - Australia
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- Bayan Resources Tbk. - Indonesia
- SMC Global Power, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Bangladesh Power Developement Board
- Kapuas Tunggal Persada - Indonesia
- Timah Investasi Mineral - Indoneisa
- Parliament of New Zealand
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