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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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Tuesday, 29 October 13
NEWCASTLE PORT SHIPPED 12.29 PER CENT MORE COAL W-W
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 12.29 per cent week on week to 3.61 million mt for ...
Monday, 28 October 13
API 8 CFR SOUTH CHINA COAL FOR Q3'14 DELIVERY LOST ON D-D,W-W & M-M
COALspot.com : API 8 CFR South China Coal swaps for average Q4 2013 delivery fell 0.22 percept M-M on Friday 25 October 2013. The CFR South China Co ...
Monday, 28 October 13
COAL SWAP FOR Q3' 2014 DELIVERY LOST ON D-D, W-W AND M-M
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery gained 0.46 percept month on month on Friday 25 October 2 ...
Saturday, 26 October 13
PANAMAX CHARTER RATES FROM INDONESIA TO INDIA STAY FIRM - SOLYM
COALspot.com: The freight market showed tendency of softness with Cape and Panamax futures and physical soft.
The BDI was down by 12 pct week end ...
Saturday, 26 October 13
DRY BULK MARKET KEEPS ON RETREATING, BUT NEW BUILDING ORDERS KEEP ON PILING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market kept on retreating this week, with the industry's benchmark, the Baltic Dry Index (BDI) falling to 1,708 points, down 78 on the ...
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rashtriya Ispat Nigam Limited - India
- Coalindo Energy - Indonesia
- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- Bulk Trading Sa - Switzerland
- New Zealand Coal & Carbon
- ASAPP Information Group - India
- Tata Chemicals Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Manunggal Multi Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- Africa Commodities Group - South Africa
- Siam City Cement - Thailand
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Bukit Makmur.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- India Bulls Power Limited - India
- Central Electricity Authority - India
- Vizag Seaport Private Limited - India
- Chamber of Mines of South Africa
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- Sical Logistics Limited - India
- Krishnapatnam Port Company Ltd. - India
- Sojitz Corporation - Japan
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
- Dalmia Cement Bharat India
- CNBM International Corporation - China
- Standard Chartered Bank - UAE
- Trasteel International SA, Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Development Corp, Philippines
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- Sakthi Sugars Limited - India
- Meenaskhi Energy Private Limited - India
- Therma Luzon, Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Kideco Jaya Agung - Indonesia
- Global Business Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- SMG Consultants - Indonesia
- Indogreen Group - Indonesia
- Orica Australia Pty. Ltd.
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Economic Council, Georgia
- Thiess Contractors Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Essar Steel Hazira Ltd - India
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- Global Coal Blending Company Limited - Australia
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement PLC, Thailand
- Bhushan Steel Limited - India
- Heidelberg Cement - Germany
- Jorong Barutama Greston.PT - Indonesia
- SMC Global Power, Philippines
- Jaiprakash Power Ventures ltd
- IHS Mccloskey Coal Group - USA
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- Xindia Steels Limited - India
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- GVK Power & Infra Limited - India
- Planning Commission, India
- Gujarat Mineral Development Corp Ltd - India
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Eastern Coal Council - USA
- Toyota Tsusho Corporation, Japan
- Coastal Gujarat Power Limited - India
- Intertek Mineral Services - Indonesia
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- IEA Clean Coal Centre - UK
- TeaM Sual Corporation - Philippines
- CIMB Investment Bank - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- South Luzon Thermal Energy Corporation
- Australian Commodity Traders Exchange
- OPG Power Generation Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Kumho Petrochemical, South Korea
- Vedanta Resources Plc - India
- Ambuja Cements Ltd - India
- Samtan Co., Ltd - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Straits Asia Resources Limited - Singapore
- MS Steel International - UAE
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Edison Trading Spa - Italy
- Energy Link Ltd, New Zealand
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- Mjunction Services Limited - India
- Mercuria Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- ICICI Bank Limited - India
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Goldman Sachs - Singapore
- Asmin Koalindo Tuhup - Indonesia
- PNOC Exploration Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Electricity Generating Authority of Thailand
- Larsen & Toubro Limited - India
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Salva Resources Pvt Ltd - India
- Deloitte Consulting - India
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Timah Investasi Mineral - Indoneisa
- Thai Mozambique Logistica
- Mercator Lines Limited - India
- Madhucon Powers Ltd - India
- Port Waratah Coal Services - Australia
- Romanian Commodities Exchange
- Agrawal Coal Company - India
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- The Treasury - Australian Government
- Kepco SPC Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Renaissance Capital - South Africa
- The University of Queensland
- Uttam Galva Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Interocean Group of Companies - India
- PTC India Limited - India
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Oldendorff Carriers - Singapore
- Maheswari Brothers Coal Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- London Commodity Brokers - England
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- Ind-Barath Power Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Indonesian Coal Mining Association
- Grasim Industreis Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- Petron Corporation, Philippines
- Central Java Power - Indonesia
- Aditya Birla Group - India
- White Energy Company Limited
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- GMR Energy Limited - India
- McConnell Dowell - Australia
- Directorate Of Revenue Intelligence - India
- Kartika Selabumi Mining - Indonesia
- PowerSource Philippines DevCo
- Kapuas Tunggal Persada - Indonesia
- GAC Shipping (India) Pvt Ltd
- Cement Manufacturers Association - India
- Tamil Nadu electricity Board
- Baramulti Group, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Makarim & Taira - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
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