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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, 22 October 13
NEWCASTLE PORT SERVED 38 OCEAN GOING VESSELS IN A WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 0.64 per cent week on week to 3.21 million mt for ...
Tuesday, 22 October 13
KOWEPO INVITED BIDS FOR MULTI GRADE COAL
COALspot.com - Korea Western Power Co., Ltd. (KOWEPO), a Korean electricity generator intends to procure 240,000 tons of multi grade coal for its Ta ...
Monday, 21 October 13
SOUTH CHINA COAL SWAP FOR 2014 DELIVERIES SHOW A POSITIVE TREND
COALspot.com : API 8 CFR South China Coal swaps for average Q4 2013 delivery fell 0.02 percept M-M on Friday 18 October 2013. The CFR South China Co ...
Sunday, 20 October 13
Q3'14 SUB-BIT INDO COAL SWAP CLOSED AT $ 61.80 PMT W/E 18 OCT' 13
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery fell 0.93 percept month on month on Friday 18 October 201 ...
Saturday, 19 October 13
NICKEL ORE SHIPMENTS KEEP SUPRAMAX CHARTER RATES STEADY - CAPT. REDDY
COALspot.com : The futures freight market continued to go down which was reflected in the physical markets as well.
The BDI continued to be soft ...
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- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Mercator Lines Limited - India
- Central Electricity Authority - India
- Rio Tinto Coal - Australia
- McConnell Dowell - Australia
- Siam City Cement - Thailand
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Eastern Coal Council - USA
- Kideco Jaya Agung - Indonesia
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- Antam Resourcindo - Indonesia
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- Borneo Indobara - Indonesia
- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Sical Logistics Limited - India
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- Sarangani Energy Corporation, Philippines
- Tata Chemicals Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- Chamber of Mines of South Africa
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Minerals Council of Australia
- Latin American Coal - Colombia
- Riau Bara Harum - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- South Luzon Thermal Energy Corporation
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- Indogreen Group - Indonesia
- GMR Energy Limited - India
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
- PNOC Exploration Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Coastal Gujarat Power Limited - India
- Ministry of Mines - Canada
- Lanco Infratech Ltd - India
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- Therma Luzon, Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Coal Association
- Mjunction Services Limited - India
- Bukit Makmur.PT - Indonesia
- ASAPP Information Group - India
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Edison Trading Spa - Italy
- Agrawal Coal Company - India
- Parliament of New Zealand
- Kepco SPC Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- Planning Commission, India
- Vizag Seaport Private Limited - India
- IHS Mccloskey Coal Group - USA
- Krishnapatnam Port Company Ltd. - India
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- Ministry of Transport, Egypt
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GVK Power & Infra Limited - India
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Indian Oil Corporation Limited
- Marubeni Corporation - India
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- Wilmar Investment Holdings
- Kalimantan Lumbung Energi - Indonesia
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- Simpson Spence & Young - Indonesia
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Essar Steel Hazira Ltd - India
- Sakthi Sugars Limited - India
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Indonesian Coal Mining Association
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Renaissance Capital - South Africa
- Australian Commodity Traders Exchange
- Miang Besar Coal Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- Cigading International Bulk Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- Makarim & Taira - Indonesia
- Merrill Lynch Commodities Europe
- Ind-Barath Power Infra Limited - India
- Dalmia Cement Bharat India
- Pendopo Energi Batubara - Indonesia
- White Energy Company Limited
- OPG Power Generation Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- The State Trading Corporation of India Ltd
- Straits Asia Resources Limited - Singapore
- Cement Manufacturers Association - India
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- ICICI Bank Limited - India
- Standard Chartered Bank - UAE
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Samtan Co., Ltd - South Korea
- Sinarmas Energy and Mining - Indonesia
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Billiton Holdings Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- Kumho Petrochemical, South Korea
- The Treasury - Australian Government
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- Jindal Steel & Power Ltd - India
- Binh Thuan Hamico - Vietnam
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- Ceylon Electricity Board - Sri Lanka
- MS Steel International - UAE
- Siam City Cement PLC, Thailand
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Posco Energy - South Korea
- Thai Mozambique Logistica
- Iligan Light & Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Attock Cement Pakistan Limited
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- San Jose City I Power Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- GAC Shipping (India) Pvt Ltd
- Baramulti Group, Indonesia
- Parry Sugars Refinery, India
- Neyveli Lignite Corporation Ltd, - India
- Georgia Ports Authority, United States
- Alfred C Toepfer International GmbH - Germany
- Ambuja Cements Ltd - India
- PTC India Limited - India
- Wood Mackenzie - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Bukit Baiduri Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- VISA Power Limited - India
- Manunggal Multi Energi - Indonesia
- Xindia Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- Tamil Nadu electricity Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining and Power Corporation, Philippines
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