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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, 15 October 13
CHINA COAL IMPORTS TO KEEP GROWING IN THE YEARS TO COME, ALBEIT AT A SLOWER RATE - EVA TZIMA / NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest monthly report, shipbroker Intermodal highlighted the growing role of coal in the energy mix. According to Intermodal's research anal ...
Tuesday, 15 October 13
NEWCASTLE PORT SHIPPED 6.50% MORE COAL W-O-W
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 6.50 per cent week on week to 3.19 million mt for ...
Monday, 14 October 13
MEMR OF INDONESIA SETS THE COAL'S SPOT PRICE AT US$ 76.61 FOR OCT'13 DELIVERY
COALspot. com - The Indonesian government has revised down government declared coal bench mark price by US$ 0.28/ MT to US$ 76.61 for October 2013 d ...
Monday, 14 October 13
CARBON POLICIES UNLIKELY TO PREVENT A COAL-FUELLED WORLD - WOOD MACKENZIE
China will propel coal growth but US, Europe and Asia will sustain global demand.
At the World Energy Congress (WEC) today Wood Mackenzie's Pres ...
Sunday, 13 October 13
Q4'13 DELIVERY SUB-BIT INDO COAL SWAP FALLS SEVEN STRAIGHT WEEK
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery fell 1.72 percept month on month on Friday 11 October 201 ...
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- Siam City Cement - Thailand
- Africa Commodities Group - South Africa
- Semirara Mining Corp, Philippines
- Savvy Resources Ltd - HongKong
- IEA Clean Coal Centre - UK
- Binh Thuan Hamico - Vietnam
- Australian Commodity Traders Exchange
- Altura Mining Limited, Indonesia
- Indika Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- Kumho Petrochemical, South Korea
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Heidelberg Cement - Germany
- TNB Fuel Sdn Bhd - Malaysia
- VISA Power Limited - India
- Banpu Public Company Limited - Thailand
- Merrill Lynch Commodities Europe
- Global Coal Blending Company Limited - Australia
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- Kideco Jaya Agung - Indonesia
- Riau Bara Harum - Indonesia
- Straits Asia Resources Limited - Singapore
- Barasentosa Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- IHS Mccloskey Coal Group - USA
- Xindia Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Economic Council, Georgia
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- Minerals Council of Australia
- Directorate Of Revenue Intelligence - India
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Georgia Ports Authority, United States
- India Bulls Power Limited - India
- Electricity Generating Authority of Thailand
- Deloitte Consulting - India
- Globalindo Alam Lestari - Indonesia
- SMG Consultants - Indonesia
- Global Business Power Corporation, Philippines
- MS Steel International - UAE
- Anglo American - United Kingdom
- Toyota Tsusho Corporation, Japan
- OPG Power Generation Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Power Finance Corporation Ltd., India
- Indo Tambangraya Megah - Indonesia
- Intertek Mineral Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PNOC Exploration Corporation - Philippines
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- White Energy Company Limited
- Bhushan Steel Limited - India
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Madhucon Powers Ltd - India
- Iligan Light & Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sical Logistics Limited - India
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Borneo Indobara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- McConnell Dowell - Australia
- Trasteel International SA, Italy
- Formosa Plastics Group - Taiwan
- Antam Resourcindo - Indonesia
- Gujarat Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Eastern Coal Council - USA
- Aditya Birla Group - India
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Larsen & Toubro Limited - India
- Mjunction Services Limited - India
- San Jose City I Power Corp, Philippines
- PowerSource Philippines DevCo
- Holcim Trading Pte Ltd - Singapore
- Marubeni Corporation - India
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- Edison Trading Spa - Italy
- Directorate General of MIneral and Coal - Indonesia
- Renaissance Capital - South Africa
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Meralco Power Generation, Philippines
- Goldman Sachs - Singapore
- Ambuja Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Planning Commission, India
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- Energy Link Ltd, New Zealand
- Commonwealth Bank - Australia
- Bharathi Cement Corporation - India
- Coalindo Energy - Indonesia
- Baramulti Group, Indonesia
- Sree Jayajothi Cements Limited - India
- Dalmia Cement Bharat India
- Singapore Mercantile Exchange
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- GAC Shipping (India) Pvt Ltd
- Attock Cement Pakistan Limited
- Aboitiz Power Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Medco Energi Mining Internasional
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Simpson Spence & Young - Indonesia
- Sakthi Sugars Limited - India
- International Coal Ventures Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- Krishnapatnam Port Company Ltd. - India
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- Kapuas Tunggal Persada - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Malabar Cements Ltd - India
- Energy Development Corp, Philippines
- Carbofer General Trading SA - India
- GMR Energy Limited - India
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- The University of Queensland
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Electricity Authority, New Zealand
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- Sinarmas Energy and Mining - Indonesia
- Indian Energy Exchange, India
- Neyveli Lignite Corporation Ltd, - India
- Vijayanagar Sugar Pvt Ltd - India
- Mercuria Energy - Indonesia
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- London Commodity Brokers - England
- PTC India Limited - India
- Bhoruka Overseas - Indonesia
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- Australian Coal Association
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Indian Oil Corporation Limited
- Global Green Power PLC Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Standard Chartered Bank - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- Bhatia International Limited - India
- Gujarat Sidhee Cement - India
- Parry Sugars Refinery, India
- PetroVietnam Power Coal Import and Supply Company
- Uttam Galva Steels Limited - India
- Agrawal Coal Company - India
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercator Lines Limited - India
- Leighton Contractors Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- GVK Power & Infra Limited - India
- Jaiprakash Power Ventures ltd
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Cement Manufacturers Association - India
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