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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, 18 October 13
WOOD MACKENZIE FORECASTS CHINA WILL OUTWEIGH THE REST OF THE WORLD FOR BASE METALS DEMAND BY 2017
China set to account for 52% of 117mt base metals market by 2017
China is on track to exceed rest of the World demand by 2017, becoming the singl ...
Friday, 18 October 13
DRY BULK MARKET ON "PAUSE" MODE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been on "pause" mode over the past week, after China's return from the week long holidays. The industry's benchm ...
Friday, 18 October 13
US PRODUCED 6.7% MORE COAL W-W
COALspot.com – United States the world’s second largest coal producer produced approximately 18.9 million short tons (mmst) of coal in a ...
Thursday, 17 October 13
CAPESIZE: RATES ARE AGAIN MOVING UPWARDS - FEARNRESEARCH
Handy
Activities were obviously slowed down in the Pacific basin. There were only few coal movements which fixed around USD 15-16k for ships in Sin ...
Thursday, 17 October 13
SGX TO LAUNCH "SGX THERMAL COAL FUTURES" NEXT MONDAY
COALspot.com: SGX is to launch two thermal coal futures contracts, SGX API 8 CFR China Coal Index Futures and SGX IHS McCloskey Indonesian Sub-bit F ...
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- SMC Global Power, Philippines
- Minerals Council of Australia
- Bhoruka Overseas - Indonesia
- Videocon Industries ltd - India
- Sakthi Sugars Limited - India
- Siam City Cement - Thailand
- Karaikal Port Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Australian Commodity Traders Exchange
- Agrawal Coal Company - India
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- South Luzon Thermal Energy Corporation
- PowerSource Philippines DevCo
- Electricity Authority, New Zealand
- Simpson Spence & Young - Indonesia
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- Gujarat Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- Carbofer General Trading SA - India
- Globalindo Alam Lestari - Indonesia
- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Global Coal Blending Company Limited - Australia
- Siam City Cement PLC, Thailand
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Standard Chartered Bank - UAE
- IHS Mccloskey Coal Group - USA
- SMG Consultants - Indonesia
- McConnell Dowell - Australia
- Aditya Birla Group - India
- Timah Investasi Mineral - Indoneisa
- Altura Mining Limited, Indonesia
- Orica Mining Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Wood Mackenzie - Singapore
- Star Paper Mills Limited - India
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- Romanian Commodities Exchange
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- PNOC Exploration Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sree Jayajothi Cements Limited - India
- Bharathi Cement Corporation - India
- Bukit Makmur.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- GAC Shipping (India) Pvt Ltd
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Power Finance Corporation Ltd., India
- Energy Link Ltd, New Zealand
- Deloitte Consulting - India
- VISA Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- Trasteel International SA, Italy
- Posco Energy - South Korea
- Mercator Lines Limited - India
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ministry of Mines - Canada
- Eastern Coal Council - USA
- Eastern Energy - Thailand
- Indo Tambangraya Megah - Indonesia
- Medco Energi Mining Internasional
- SN Aboitiz Power Inc, Philippines
- Sical Logistics Limited - India
- Therma Luzon, Inc, Philippines
- Bulk Trading Sa - Switzerland
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- Energy Development Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Australian Coal Association
- Central Java Power - Indonesia
- Chettinad Cement Corporation Ltd - India
- Mintek Dendrill Indonesia
- Cement Manufacturers Association - India
- Bukit Asam (Persero) Tbk - Indonesia
- Africa Commodities Group - South Africa
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Sojitz Corporation - Japan
- Malabar Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Barasentosa Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Independent Power Producers Association of India
- Indonesian Coal Mining Association
- Essar Steel Hazira Ltd - India
- Tamil Nadu electricity Board
- Indika Energy - Indonesia
- Antam Resourcindo - Indonesia
- Merrill Lynch Commodities Europe
- Indian Oil Corporation Limited
- ICICI Bank Limited - India
- Ministry of Transport, Egypt
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining Corp, Philippines
- Coal and Oil Company - UAE
- Miang Besar Coal Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Straits Asia Resources Limited - Singapore
- Grasim Industreis Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Petron Corporation, Philippines
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Formosa Plastics Group - Taiwan
- Wilmar Investment Holdings
- Heidelberg Cement - Germany
- Metalloyd Limited - United Kingdom
- Ind-Barath Power Infra Limited - India
- Riau Bara Harum - Indonesia
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Xindia Steels Limited - India
- Bangladesh Power Developement Board
- Meralco Power Generation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Ministry of Finance - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Kideco Jaya Agung - Indonesia
- Dalmia Cement Bharat India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Latin American Coal - Colombia
- CNBM International Corporation - China
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- Georgia Ports Authority, United States
- Ambuja Cements Ltd - India
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining and Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Planning Commission, India
- Parliament of New Zealand
- Aboitiz Power Corporation - Philippines
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- Economic Council, Georgia
- Intertek Mineral Services - Indonesia
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Rio Tinto Coal - Australia
- Gujarat Sidhee Cement - India
- Kepco SPC Power Corporation, Philippines
- PTC India Limited - India
- Kaltim Prima Coal - Indonesia
- Baramulti Group, Indonesia
- Singapore Mercantile Exchange
- MS Steel International - UAE
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- IEA Clean Coal Centre - UK
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Bahari Cakrawala Sebuku - Indonesia
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Vedanta Resources Plc - India
- Central Electricity Authority - India
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- CIMB Investment Bank - Malaysia
- Tata Chemicals Ltd - India
- Bayan Resources Tbk. - Indonesia
- Jaiprakash Power Ventures ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The State Trading Corporation of India Ltd
- Mjunction Services Limited - India
- San Jose City I Power Corp, Philippines
- Kumho Petrochemical, South Korea
- Oldendorff Carriers - Singapore
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