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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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Monday, 04 November 13
API 8 CFR S.CHINA COAL SWAP FOR Q3' 2014 DELIVERY CLOSED 3.65% HIGHER COMPARED TO Q1' 2014 PRICE
COALspot.com : API 8 CFR South China Coal swaps for average Q4 2013 delivery fell 0.24 percept W-W on Friday 1 November 2013. The CFR South China Co ...
Sunday, 03 November 13
H2' 2014 INDONESIAN COAL PRICE ( SWAPS) SHOWS POSITIVE TREND
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q1’2014 delivery gained 0.24 percept week on week on Friday 1 ...
Sunday, 03 November 13
THE CAPE SIZE INDEX FELL 13.61 PCT W-W
COALspot.com: The freight market continued to soften on the cape and panamax sectors , however the supramax and handy size remained fairly firm.
...
Saturday, 02 November 13
DRY BULK SHIPPERS AREN'T CELEBRATING, BUT THEIR SILENCE IS GOLDEN - MARKET REALIST
In October, performance for major dry bulk shipping companies was mixed. Companies like DryShips Inc. (DRYS) had pulled back more than Diana Shippin ...
Friday, 01 November 13
US'S COAL PRODUCTION UP 0.9 PERCENT W-W
COALspot.com – United States the world’s second largest coal producer, produced approximately 19.3 million short tons (mmst) of coal in ...
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- Wood Mackenzie - Singapore
- London Commodity Brokers - England
- Sakthi Sugars Limited - India
- Planning Commission, India
- Bhoruka Overseas - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Coalindo Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- MS Steel International - UAE
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Attock Cement Pakistan Limited
- Globalindo Alam Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Sindya Power Generating Company Private Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- SMG Consultants - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Posco Energy - South Korea
- International Coal Ventures Pvt Ltd - India
- Dalmia Cement Bharat India
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Binh Thuan Hamico - Vietnam
- Siam City Cement PLC, Thailand
- Miang Besar Coal Terminal - Indonesia
- Tamil Nadu electricity Board
- Coal and Oil Company - UAE
- Ministry of Transport, Egypt
- GAC Shipping (India) Pvt Ltd
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Bukit Baiduri Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Manunggal Multi Energi - Indonesia
- Aditya Birla Group - India
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- Riau Bara Harum - Indonesia
- Siam City Cement - Thailand
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- Coastal Gujarat Power Limited - India
- Minerals Council of Australia
- TNB Fuel Sdn Bhd - Malaysia
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- SN Aboitiz Power Inc, Philippines
- The University of Queensland
- Essar Steel Hazira Ltd - India
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Independent Power Producers Association of India
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Edison Trading Spa - Italy
- CNBM International Corporation - China
- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- Salva Resources Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- Parliament of New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Authority, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Mintek Dendrill Indonesia
- Jaiprakash Power Ventures ltd
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- TeaM Sual Corporation - Philippines
- Semirara Mining Corp, Philippines
- Antam Resourcindo - Indonesia
- McConnell Dowell - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- Global Coal Blending Company Limited - Australia
- Sical Logistics Limited - India
- Barasentosa Lestari - Indonesia
- The Treasury - Australian Government
- Ind-Barath Power Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- San Jose City I Power Corp, Philippines
- New Zealand Coal & Carbon
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Videocon Industries ltd - India
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- Thiess Contractors Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- Commonwealth Bank - Australia
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- Bangladesh Power Developement Board
- Metalloyd Limited - United Kingdom
- Price Waterhouse Coopers - Russia
- Petron Corporation, Philippines
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- Borneo Indobara - Indonesia
- Bulk Trading Sa - Switzerland
- CIMB Investment Bank - Malaysia
- Indo Tambangraya Megah - Indonesia
- Bayan Resources Tbk. - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Agrawal Coal Company - India
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- Renaissance Capital - South Africa
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bhatia International Limited - India
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- Wilmar Investment Holdings
- Global Green Power PLC Corporation, Philippines
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Merrill Lynch Commodities Europe
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- PetroVietnam Power Coal Import and Supply Company
- Australian Coal Association
- VISA Power Limited - India
- Uttam Galva Steels Limited - India
- Banpu Public Company Limited - Thailand
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- PTC India Limited - India
- Maheswari Brothers Coal Limited - India
- Deloitte Consulting - India
- Rio Tinto Coal - Australia
- Eastern Coal Council - USA
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Africa Commodities Group - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- Mercuria Energy - Indonesia
- Trasteel International SA, Italy
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Indogreen Group - Indonesia
- Electricity Generating Authority of Thailand
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
- Karaikal Port Pvt Ltd - India
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- White Energy Company Limited
- Sojitz Corporation - Japan
- Medco Energi Mining Internasional
- Ambuja Cements Ltd - India
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Ministry of Mines - Canada
- The State Trading Corporation of India Ltd
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Kaltim Prima Coal - Indonesia
- Eastern Energy - Thailand
- Cigading International Bulk Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Kepco SPC Power Corporation, Philippines
- Georgia Ports Authority, United States
- Latin American Coal - Colombia
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- Larsen & Toubro Limited - India
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