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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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Friday, 01 November 13
DRY BULK MARKET IN FIRST POSITIVE SIGN IN DAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Owners of dry bulk carriers are well aware of the rollercoaster ride that has been the market for their vessels over the past few years. This trend ...
Thursday, 31 October 13
HANDY: ACTIVE; PANAMAX: QUIET; CAPESIZE: NO LIGHT
Handy
The handy market had an active week however not directly translated into the rates we´ve seen in the Pacific. We see more coal and baux ...
Wednesday, 30 October 13
INDONESIAN STATE OWNED COAL MINER HAS EXPORTED 7.02 MILLION TONS OF COAL IN 9 MONTHS
COALspot.com : PT. Bukit Asam, Indonesian state owned coal miner has sold 13.24 million tons of coal for the period January - September 2013. Accord ...
Wednesday, 30 October 13
DRY BULK MARKET HAS LOST FURTHER GROUND THIS PAST WEEK - INTERMODAL
Chartering (Wet: Firm+ / Dry: Stable-)
The Dry Bulk market has lost further ground this past week, as de-creased activity in both basins for both C ...
Wednesday, 30 October 13
CAPESIZE: DOWNWARD; SUPRAS AND HANDIES: STABLE - INTERMODAL
The Dry Bulk market has resumed its downward movement, noting another dip for a third week in a row. The larger size segments were responsible for p ...
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- International Coal Ventures Pvt Ltd - India
- Marubeni Corporation - India
- Port Waratah Coal Services - Australia
- Videocon Industries ltd - India
- Coastal Gujarat Power Limited - India
- New Zealand Coal & Carbon
- Latin American Coal - Colombia
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- GMR Energy Limited - India
- Savvy Resources Ltd - HongKong
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Gujarat Sidhee Cement - India
- Minerals Council of Australia
- Malabar Cements Ltd - India
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Commonwealth Bank - Australia
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- India Bulls Power Limited - India
- Ambuja Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Kepco SPC Power Corporation, Philippines
- Siam City Cement - Thailand
- Indo Tambangraya Megah - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Globalindo Alam Lestari - Indonesia
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- Energy Development Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Thiess Contractors Indonesia
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- Tata Chemicals Ltd - India
- Oldendorff Carriers - Singapore
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Bukit Makmur.PT - Indonesia
- Larsen & Toubro Limited - India
- Georgia Ports Authority, United States
- Madhucon Powers Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Parliament of New Zealand
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Barasentosa Lestari - Indonesia
- SMC Global Power, Philippines
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Global Business Power Corporation, Philippines
- Medco Energi Mining Internasional
- Cement Manufacturers Association - India
- Meralco Power Generation, Philippines
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- The University of Queensland
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Jindal Steel & Power Ltd - India
- Electricity Authority, New Zealand
- Salva Resources Pvt Ltd - India
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Australian Coal Association
- IEA Clean Coal Centre - UK
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- ICICI Bank Limited - India
- Vizag Seaport Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Baramulti Group, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining and Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- South Luzon Thermal Energy Corporation
- Uttam Galva Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Heidelberg Cement - Germany
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- VISA Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- The State Trading Corporation of India Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Attock Cement Pakistan Limited
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Economic Council, Georgia
- Iligan Light & Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Tamil Nadu electricity Board
- Petrochimia International Co. Ltd.- Taiwan
- Metalloyd Limited - United Kingdom
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- Sarangani Energy Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- Formosa Plastics Group - Taiwan
- Global Green Power PLC Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Asmin Koalindo Tuhup - Indonesia
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- Ministry of Finance - Indonesia
- London Commodity Brokers - England
- Eastern Coal Council - USA
- Maharashtra Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- Pendopo Energi Batubara - Indonesia
- Sindya Power Generating Company Private Ltd
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- Cigading International Bulk Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Standard Chartered Bank - UAE
- Straits Asia Resources Limited - Singapore
- Edison Trading Spa - Italy
- Bhoruka Overseas - Indonesia
- Kobexindo Tractors - Indoneisa
- White Energy Company Limited
- Antam Resourcindo - Indonesia
- OPG Power Generation Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- Africa Commodities Group - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rio Tinto Coal - Australia
- Binh Thuan Hamico - Vietnam
- Star Paper Mills Limited - India
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- TeaM Sual Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Posco Energy - South Korea
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- Borneo Indobara - Indonesia
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- Goldman Sachs - Singapore
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- Essar Steel Hazira Ltd - India
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Sree Jayajothi Cements Limited - India
- SMG Consultants - Indonesia
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- Trasteel International SA, Italy
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- ASAPP Information Group - India
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
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